[MARKET ANALYSIS] European bourses gain, STMPA FP surges over forecast boost; US equity futures flat just shy of ATHs

European bourses (STOXX 600 +0.8%) start Tuesday’s trade with broad gains after raised hopes of an imminent US-Iran deal. US President Trump said negotiations with Tehran were continuing and signalled expectations of a deal to extend the ceasefire and reopen Hormuz "over the next week". Furthermore, Trump also claimed Israel and Hezbollah had agreed to stop shooting, which further weighed on energy prices and boosted the global risk tone.
Sectors highlight the positive bias. Technology (+2.7%) tops the sector pile, with Basic Resources (+2.2%) following closely behind as metals surge amid worries of a tighter global supply. Energy (-0.7%), Health Care (-0.6%) and Food, Beverages & Tobacco (-0.4%) are the only sectors printing modest losses.
Key movers include: STMicroelectronics (+8.7%), nearly doubles its data centre revenue to USD 1bln (prev. “nicely above” USD 500mln); Abivax (-29.6%), UC trial hits phase 3 endpoints but 3 cancer cases dim sentiment; Prosus (+9.8%), boosted after Tencent is set to launch an AI agent on WeChat; Voestalpine (-3.2%), downgraded to equal weight at Morgan Stanley.
An update on the UniCredit-Commerzbank front: the Italian bank has reportedly secured commitments to increase its stake in Commerzbank well above 30%. This will further put pressure on UniCredit's EUR 38.6bln takeover offer for the German bank.
Citi’s positioning model shows renewed long flows into EuroStoxx, DAX and FTSE. However, EuroStoxx remains net short. In the US, risk flows continue into large caps, which have now driven positioning further into stretched territory, increasing the risk for profit-taking selloffs near ATHs. Similarly, for the KOPSI, positioning is the most extended globally.
US equity futures (ES/NQ -0.1%, RTY U/C) trade with very modest losses as prices continue to grind to new ATHs daily.