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Investors are bracing for an ECB rate hike on Thursday. Markets expect the European Central Bank to raise rates by 25 basis points, which could weigh on growth and corporate earnings. Investors are also awaiting guidance on whether further hikes will follow.

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ING said in an analysis on Thursday morning that: “We expect the ECB to hike by 25 basis points from 2.0% to 2.25%, supported by a hawkish tone, but the bar has risen to surprise markets. Despite oil prices testing new lows earlier this week, the EUR curve is increasingly set on three rate hikes.”

Stock markets across Europe opened in positive territory despite the drop in Asian shares following another sell-off in AI-related stocks on Wall Street on Wednesday.

The Euro Stoxx 50 opened 1.2% higher but the broader pan-European Stoxx 600 rose was flat in early trading.

Germany’s Dax and France’s CAC 40 were both up by 1%, while the UK’s FTSE 100 led with a 1.2% gain. Meanwhile, Italy’s FTSE MIB rose by 0.7%.

In other dealings, Asian shares mostly fell on Thursday after another sell-off in artificial intelligence stocks weighed on Wall Street, while oil prices rose.

Japan’s Nikkei 225 lost 0.5%, South Korea’s Kospi fell 0.2%, and Australia’s S&P/ASX 200 slipped 0.2%. Taiwan’s Taiex declined 0.4%.

Hong Kong’s Hang Seng index edged 0.2% higher, while Shanghai’s Composite index dropped 0.2%.

On Wall Street, on Wednesday, the S&P 500 fell 1.6%, marking its first consecutive decline in three weeks. The Dow Jones Industrial Average dropped 1.9%, while the Nasdaq Composite lost 2%.

Wall Street has been unsettled since last week, when AI stocks reversed course after hitting record highs. Investors are weighing whether the recent pullback has eased concerns over excessive optimism or signals the beginning of a more prolonged downturn.

Super Micro Computer, which sells AI servers, plunged 28% after announcing late on Tuesday plans to raise $7 billion through sales of common stock and convertible preferred shares. Companies often seek to raise capital when share prices are elevated, though such moves can dilute existing shareholders’ stakes.

Micron Technology swung between gains and losses before ending down 4.7%. The stock has experienced sharp volatility in recent sessions, having fallen 7.7% last Thursday, dropped a further 13.3% on Friday and then rallied 9.9% on Monday. Despite the swings, its shares remain up 212.5% so far this year.

Nvidia, the chipmaker that has grown into a nearly $4.9 trillion company on the back of the AI boom, was the biggest drag on the S&P 500 after falling 3.7%. Broadcom, another major AI beneficiary, lost 5.1%.

Some pressure on AI-related shares may also be linked to investors raising cash ahead of several high-profile stock market debuts in the United States. SpaceX’s initial public offering could take place later this week.

Weakening stocks for companies with big fuel bills also pulled the market lower. United Airlines sank 6.2%, and cruise operator Carnival fell 6.3% after oil prices rose due to the latest fighting in the war with Iran.

Oil prices and US inflation

Brent crude rose 1.8% to $93.10 a barrel on Wednesday after President Donald Trump warned that Iran would “pay the price” for stalled negotiations between the two sides over the conflict. The war has effectively closed the Strait of Hormuz to oil tankers, disrupting crude shipments from the Persian Gulf to customers worldwide.

Higher oil prices have added to inflationary pressures. A report released on Wednesday showed US consumer prices rose in May at the fastest annual pace in three years.

Traders are increasingly betting that the Federal Reserve will need to raise its benchmark interest rate at least once this year in response to persistent inflation and a resilient labour market.

Higher yields can slow economic growth and weigh on a range of investments, including stocks and cryptocurrencies. They tend to hit the most highly valued assets hardest, and some critics argue that enthusiasm around AI has inflated a market bubble.

In early European trading, Brent crude was up by 0.5% at $93.60 a barrel, while US benchmark crude gained 0.7% to $90.70.

The US dollar traded at 160.58 Japanese yen in the morning. The euro rose slightly to $1.1542, and the UK pound cost $1.3377.

The gold prices dipped by 0.6% to $4,109.60 an ounce.

SpaceX’s long-anticipated IPO is hours away from reshaping the fortunes of thousands of employees.

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The listing, set for this Friday, is expected to mint millionaires not only among senior engineers and executives, but also among blue-collar workers, including cooks and welders, who received equity as part of their compensation packages.

The windfall is heavily concentrated around Brownsville, Texas, one of the poorest cities in the US, where SpaceX employs more than 3,000 people at its Starbase facility.

What makes this IPO unusual, even by Silicon Valley standards, is how far down the organisational chart the equity grants appear to have reached.

Some estimates cited by media reports put the total number of newly minted millionaires across the entire company at around 4,000. However, the figures could not be independently verified.

Michael Limas, a financial planner based in Brownsville, told Bloomberg that several of the company’s non-technical workers received stock options as part of their pay.

“SpaceX has been very friendly with options at various levels, from top to bottom. It’s something that’s unique to this area,” Limas stated.

One example cited by the investment research platform Moby illustrates the scale rather starkly. A welder’s initial equity grant of $10,000 (€8,650) is now reportedly valued at close to $880,000 (€762,000) ahead of the listing.

These individual figures reflect a broader picture of generous equity compensation that has been reported consistently across multiple outlets.

The IPO itself features a staggered lockup structure rather than the standard 180-day cliff that most companies employ.

According to the prospectus, it includes multiple early release windows, among them a performance-linked mechanism that would activate if the stock trades 30% above its IPO price on five out of ten consecutive trading days. That would allow some employees to access their new wealth within weeks of the debut.

Brownsville braces for the ripple effects

SpaceX’s impact on the region has already been striking, and the financial gains generated by the IPO are likely to amplify it.

Brownsville has long ranked among the most economically deprived cities in the US, with a median family income roughly a third below the national average, according to government data.

SpaceX arrived about a decade ago, establishing its Starbase launch facility on the Gulf of Mexico shore around 40 kilometres from the city centre.

The transformation since then has reportedly been marked by an influx of professionals from California and elsewhere. Rising housing costs have followed, as they often do when wealth becomes concentrated in a particular area.

According to several realtors and economists, the median housing prices in the broader Brownsville-Harlingen metro area have risen roughly 25% since 2020, from around $185,000 (€160,000) to $233,000 (€201,000).

Long-time residents, many of them on modest incomes, are feeling the pressure.

For many employees, the transition from holding shares they could not easily sell to having access to cash brings its own complications.

According to Bloomberg, wealth managers in the region describe a climate of considerable anxiety among staff, given the sense that this may be their single opportunity to build generational wealth and that getting the timing and tax planning wrong could be costly.

More than 100 SpaceX employees in the region reportedly pooled together to negotiate wealth-management terms collectively with the advisory firm Choreo, a move that helped them secure lower management fees by bringing between $1 billion (€865mn) and $5 billion (€4.33bn) in potential assets to the table.

Brownsville’s mayor, John Cowen, a sixth-generation resident of the area, has sought to frame the transformation in positive terms, arguing to US media that it is great for the city to be known as a place for investment.

Beyond SpaceX itself, other industrial projects have followed in the company’s wake, including building a liquefied natural gas export terminal near the Port of Brownsville.

Back in March, US President Donald Trump also announced the construction of a $300 billion (€260bn) oil refinery at the port, which could reportedly bring 500 full-time jobs.

Whether the IPO ultimately delivers on its promise, and how equitably its benefits filter through a city that has known far more hardship than prosperity, remains to be seen.

European Commission President Ursula von der Leyen, European Council President Antonio Costa and with South Korean President Lee Jae-myung celebrated the signing of new a digital trade agreement at a ceremony in Brussels on Wednesday.

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The event marked the EU and South Korea’s 11th summit, with everything from security and defence to trade on the agenda.

“Korea is one of Europe’s closest partners in the Indo-Pacific region and on the global stage,” von der Leyen said. “In today’s uncertain world, stable and trusted partnerships like ours are more precious than ever.”

The trio released a joint statement extolling the value of the talks and committing the two sides to a firm and friendly relationship.

“We reaffirm our shared commitment to effective multilateralism, and to a stable and predictable rules-based free and fair economic order,” the statement reads.

The semiconductor factor

Both sides have an interest in diversifying their trade relationships at a time of growing tensions with both China and the US, and the EU-South Korea digital trade agreement comes more than a decade after a landmark free trade deal.

Since 2015, trade between the EU and South Korea has doubled, with goods trade reaching approximately €124.25 billion in 2025, according to figures from the European Commission.

“The European Union-Korea Free Trade Agreement remains one of the European Union’s most successful trade agreements since its entry into enforcement in 2011,” European Council António Costa said on Wednesday.

South Korea is becoming an increasingly important investor in Europe, particularly in strategic sectors such as batteries, electric vehicles and semiconductors.

For the EU, a key objective is to secure semiconductor supply chains while attracting further investment from Korean companies into Europe.

“Korea has a global leadership position in semiconductors,” an EU official said. “This is clearly an area with significant potential for cooperation that would benefit both sides.”

The digital trade agreement concluded on Wednesday is expected to complement the broader trade partnership by reducing “unnecessary barriers to digital trade” and providing greater “legal certainty” for businesses operating across the two markets, according to another EU official. It will facilitate cross-border data flows while prohibiting the mandatory transfer of source code.

The deal is also designed to establish robust online consumer protection rules, though both partners intend to maintain their respective levels of protection for personal data and privacy.

Economic security was also high on the summit agenda, with the two sides agreeing to establish a high-level dialogue on supply chain resilience.

Supply chains came under pressure last year following China’s restrictions on exports of strategic materials, including rare earths – essential for green technologies and the defence sector – as well as products linked to the chip industry, which are critical to automotive manufacturing.

Security and defence

One thing that did not get over the line was a security of information agreement, which had been touted by EU officials prior to the summit as a means of strengthening the flow of classified information between Brussels and Seoul.

“I hope that the security of information agreement will be adopted soon, so that Korea and the EU can share confidential information safely, which will allow the two sides to engage in industrial and research cooperation actively through information exchange exchange,” President Lee said on Wednesday.

The agreement would build on the Security and Defence Partnership agreement that South Korea and the EU signed in 2024. That deal was designed to facilitate cooperation in areas spanning maritime security, countering hybrid threats, fighting foreign information manipulation and interference, and more besides.

In the run-up to this week’s talks, a senior EU official said a key topic of the discussions will be nuclear non-proliferation, as North Korea continues to hold a small but concerning stockpile of nuclear-armed warheads.

North Korea (the DPRK) and Russia were considered “big questions” at the summit, the source said, with Brussels ready to share information on its support for Ukraine with Seoul.

The joint statement from the summit reiterates this, with words of condemnation directed at North Korea and other nations who enable Russia to sustain its war of aggression against Ukraine.

“We urge Russia and the DPRK to immediately cease all such activities and abide by the UN Charter and all relevant United Nations Security Council resolutions,” the statement reads.

Californians couldn’t escape billionaire Tom Steyer’s political ads — during newscasts, sitcoms, or sporting events; on streaming services, YouTube, influencers’ social media feeds, or their mailboxes. Even the Puppy Bowl.

Yet despite spending a record-shattering $216 million of his wealth on his run for governor, the Democrat failed to win enough votes in last week’s primary to advance to the November general election to replace termed-out Gov. Gavin Newsom.

“Money isn’t everything, even though it obviously helps,” said Andrea Godfrey Flynn, a marketing professor at the University of San Diego. “It boosted Steyer way up. … But there are so many other factors at play that it may not have been enough.”

Steyer, a hedge fund co-founder turned environmental warrior, polled at 1% shortly before he entered the governor’s race in November, according to a survey by UC Berkeley’s Institute of Governmental Studies that was co-sponsored by the Los Angeles Times.

He climbed in subsequent polls, hitting 19% in the same poll shortly before the June 2 primary, putting Steyer in contention for winning one of the top two spots in the contest that would allow him to advance to the November election. But then he hit a ceiling, and on Tuesday, it became official that he failed to advance.

Steyer emailed supporters Tuesday expressing gratitude for their efforts backing his campaign, endorsements and votes.

“Together, we fought for a California that belongs to the people who keep it running every day, and we insisted that they do not have to settle for a system that protects corporate profits at the expense of working people,” he wrote. “I’m proud of how we never compromised our values or lowered our sights for what California can and should be.”

He pointed with pride at major corporations such as Chevron and Meta spending heavily to oppose his bid, and said their tens of millions of dollars spent attacking him shows the flaws in the electoral system. And he acknowledged that may be part of the reason some voters were skeptical of voting for a billionaire.

“I’m proud of the enemies we made,” Steyer said. “This campaign proved that business-as-usual depends on politics-as-usual, and there is no going back. We must continue to fight for a system where democracy serves Californians, not corporations — and where you do not have to be a billionaire to run on single-payer, or on breaking up monopolies, or on calling out a corrupt system when you see it. Because people are fed up with a system rigged to benefit billionaires and leave them behind.”

As of Tuesday evening, Steyer had received more than 1.9 million votes of the more than 9 million cast, lagging behind the two candidates who will appear on the November ballot: Republican Steve Hilton, a former Fox News commentator, and Democrat Xavier Becerra, a longtime elected official who most recently served in President Biden’s cabinet. Steyer was trailing Hilton, the second-place finisher, by just over 200,000 votes.

Steyer immediately endorsed Becerra, whom he had relentlessly attacked in the closing weeks of the campaign as beholden to corporations with business in front of the governor.

California has a history of unsuccessful self-funders. Former Northwest Airlines co-chairman Al Checchi spent more than $40 million of his money on an unsuccessful gubernatorial primary campaign in 1998, which broke records at the time.

More than a decade later, former EBay chief Meg Whitman spent $144 million of her wealth on her bid to become California’s governor, setting a new national record for spending on a state election. She won the GOP nomination but lost in the general election.

This year’s gubernatorial contest is not the first time Steyer has spent an inordinate sum seeking office. In 2020, he spent $342 million on a brief, unsuccessful presidential campaign.

Sheri Sadler, a veteran Los Angeles-based Democratic media buyer, said Steyer’s 2026 gubernatorial deluge was notable.

“I literally saw his spots ad nauseam,” she said. “They left almost no stone unturned.”

Sadler worked for Steyer in the final weeks of his presidential bid and scheduled $50 million of billionaire Rick Caruso’s money on ads during his unsuccessful 2022 Los Angeles mayoral campaign.

She believes that Steyer hit a ceiling because voters who are bombarded by ads eventually feel that the candidate is trying to purchase their affection.

“It’s one thing to give me a message I can resonate with. If they’re just trying to buy my vote, that feels different to me,” she said, adding that Steyer’s wealth undermined his platform, which included support for raising taxes on billionaires. “That’s my gut. And I feel like that’s what happened to us on Caruso and possibly why he didn’t run” for governor this year.

Steyer, 68, made his fortune founding a hedge fund that included investments in fossil fuels, private prisons and other businesses that are controversial among Democrats. He told voters that he walked away from the firm 14 years ago, leaving an enormous amount of money on the table, because it did not align with his morals. Steyer adds that he and his wife have pledged to give away most of their wealth before they die.

And unlike many wealthy self-funders, Steyer did not leap into a campaign as a political neophyte who assumed their business skills would translate into being an effective elected official.

Steyer and his wife, Kat Taylor, are longtime donors to Democratic candidates, but for well over a decade, they have spent hundreds of millions of dollars on liberal causes such as fighting climate change, mobilizing young voters, urging the impeachment of President Trump, opposing an effort by oil companies to suspend California environmental standards, increasing the state cigarette tax and supporting last year’s redrawing of the state’s congressional districts to counter Trump.

Darry Sragow, a veteran Democratic strategist who advised Checchi, said that Steyer’s focus on such causes had the potential to be meaningful to voters who are often skeptical about the sincerity and motives of rich candidates.

“Tom Steyer has done a good job in that respect, because if you’re going to overcome that skepticism, it’s very helpful for the candidate to show that he or she has actually been involved in the world of public policy and politics for an extended period,” and Steyer has, Sragow said.

Assemblyman Isaac G. Bryan (D-Los Angeles), who endorsed Steyer, argued that he promoted proposals that were against his personal interests, such as the proposed billionaire’s tax that is expected to appear on the November ballot.

“Interestingly enough, Tom Steyer is also the only candidate who’s talked about campaign finance reform and wanting to get money out of politics, including his money, to return power to the people and have publicly financed elections,” Bryan said after a Steyer rally near downtown L.A. on May 31.

Former Orange County Rep. Katie Porter and state Supt. of Public Instruction Tony Thurmond also campaigned on limiting the influence of corporate PAC money in elections, or implementing publicly financed elections in California. Porter often criticized Steyer for running as a “change agent” while spending millions he earned from investments in oil and gas.

“You paid the lowest tax rate on this stage and yet you made the billions that you’re using to fund your campaign off fossil fuels,” she said to Steyer during an April 28 debate in Claremont.

Political experts argue that messages that seem contradictory to a candidate’s background, as well as drowning voters with incessant ads, can be jarring and off-putting to the electorate.

“It can be an overload to voters where they hit that tipping point where they’re no longer interested,” Flynn said.

Despite Steyer’s foundational argument that his wealth meant he was not beholden to anyone, she said voters may be unable to reconcile a billionaire’s ability to understand or empathize about an average Californian’s needs.

“The messaging still is a giant factor,” Flynn said. “I’m curious [about] how believable it came across to voters — can you trust a billionaire to really care about affordability, someone who made money working with business or in business not to care about special interests?”

While Steyer campaigned as a hard-left liberal, he failed to be the top pick for progressives. Steyer had the support of 35% of likely voters who identified as strongly liberal while Becerra was backed by 37%, according to Berkeley’s May poll.

After talking to college Democrats at UCLA on the eve of the primary, Steyer said regardless of what happens in the primary, he will remain politically involved, though he would not run for president in 2028.

“I’m going to keep working on these issues, because I’ve been working full-time on these issues for 14 years,” Steyer said. “There’s no question what I’m going to do. How I do it is a little bit up in the air.”

Times staff writer Dakota Smith contributed to this report.

Samantha King visited a fancy five-star hotel in one of the cheapest cities in the UK for a luxury break to see whether she’d get a good deal for her money

Illuminated by candles and boasting a valet service, swanky on-site restaurant and enviable Leeds city centre location might sound like it would set you back a hefty sum, but it is actually one of the cheapest luxury stays in the UK.

Leeds has just been named as one of the most affordable places to go if you want to sleep in five-star accommodation, with Hotels.com’s 2026 Hotel Price Index revealing that the average cost of top lodging in the northern metropolis totals around £145 per night.

Situated just a four-minute walk from the city’s train station is Dakota Leeds, a boutique hotel that offers cost-conscious travellers a quiet cocoon right next door to some of the city’s most talked-about nightlife spots. Its immediate neighbour is the revered Chinese restaurant, Tattu. Better still, rooms can be found for even less than that average nightly rate.

Do you have a story to share? Email webtravel@reachplc.com

The glossy black building on Russell Street houses a dimly lit and lightly scented hotel lobby offering a calming atmosphere evocative of a spa, and I was welcomed like an old friend as I spilled through its front doors sweaty, flustered and just a tad sunburnt on a particularly hot Saturday afternoon for my one-night stay.

Thankfully, a quick and efficient check-in service awaited, and I was swiftly directed to my balcony room on the ninth floor, accessible via a lift. As a big light hater, I loved that the subdued lighting wasn’t confined to the lobby. The corridors on each floor were dark too, with the lights only switching on one by one to mark the way to your room.

The room itself, I stayed in 907, had a generously sized corridor that opened up into the cosy double room, which had all the essentials and then some. There was a sofa with a sumptuous wool throw, a chair, a table and a desk which featured a particularly thoughtful detail: a built-in piece of slate to pop your hot curling tongs on.

A mysterious black box that looked like it could house two cufflinks was also waiting on the table. I discovered it contained salted caramel chocolate drops, which I would go so far as to say were the most delicious I have ever tasted. I washed them down with an espresso rustled up from the room’s generous drinks station, which featured two complimentary packets of chocolate cookies and an array of Teapigs teas, all of which I had gratefully consumed by the time I checked out the next day.

The bathroom was frankly gorgeous, with soft grey tiles, a rain shower and a separate bath, plus Molton Brown toiletries and a basket full of towels of all sizes. There were also two hotel robes hung up ready to use.

Staying on a Saturday night meant the party was in full swing around the hotel, truly testing its soundproofing. Despite the thrum of the city below, I heard only the faint sound of buskers drift up to the outdoor balcony, plus the occasional faint growl of a plane coming in to land at the nearby airport. Sliding the balcony door shut effectively blocked out the sound of the outside world entirely, which was reassuring given how much of a light sleeper I am.

I had booked to eat at the on-site restaurant that night, with the menu boasting an array of steaks and other lovely-sounding dishes from the grill, though forget affordability if you are looking to dine in, as it is expensive.

The usual restaurant area had been booked out for a private function the night I was there, so I was offered a spot on the covered outdoor terrace to eat. The space was decorated tastefully, with twinkling lights, faux olive trees and sheepskin throws over each chair, creating an intimate and romantic dining spot. Sadly, no amount of plastic plants could subdue the sound of revellers on the other side of the wall.

Despite the party atmosphere jarring with the upmarket dining experience, the food was still divine and the service top-notch. I enjoyed a starter of Fritto Misto (£12), a perfectly cooked medium-rare 12oz rib-eye steak (£45) for my main, with a side of truffle and Parmesan chunky chips (£8.50) and onion rings (£5), and a chocolate tart (£8) for dessert. The meal alone cost a little over £200 for two diners with drinks and the service charge on top, but it is easily something to swerve if you want to keep costs down, though you will not be disappointed should you choose to indulge.

With a full belly, I had a fantastic night’s sleep on a satisfyingly firm mattress with just the right amount of give, and the following morning I finally got a look at the restaurant area as I headed down for breakfast.

Aside from the room itself, the £24 breakfast was one of the trip’s highlights. I could not believe how much you got for your money. Warm and beautifully presented breakfast dishes such as eggs Benedict, smoked salmon and scrambled eggs were available to order and have served to your table, as well as a buffet laid out with fresh fruit, yoghurts, juices and cakes to pick at.

Would I stay at Dakota Leeds again? In a heartbeat. But I would be more savvy about when I would go. As the Hotel Price Index advises, the best deals can be had by booking one week ahead and opting for a Sunday night stay.

Staying at off-peak times such as Sundays means you can bag a room at Dakota Leeds for as little as £125 before adding any optional extras such as breakfast. Signing up to the hotel’s free loyalty scheme brings that down even further to £110, meaning it rivals the prices of the UK location deemed most affordable of all in the Hotel Price Index, Brighton, which comes in at an average of £115 per night.

Earlier this year, I paid £60 for a hotel room on the other side of Leeds that had a fire escape for a front door. I can hardly believe that for about £50 more I could have stayed at Dakota Leeds, which feels welcoming and warm and is a perfectly situated sanctuary for anyone looking to soak in all the city has to offer in style.

The cheapest UK cities for a 5* hotel stay

1. Brighton: £115
2. Bristol: £115
3. Chichester: £120
4. Llandudno: £125
5. Worcester: £125
6. Bournemouth: £130
7. Cornwall: £135
8. Leeds: £145
9. Cardiff: £155
10. Liverpool: £170

Certain nations around the world are so wealthy that they wield enormous power over the global economy. When people think about the world’s biggest financial giants, two names typically come to mind straight away – the United States and China.

However, the next country is not located in Asia or North America. It’s situated in Europe, and its economy is substantially larger than most realise; it also boasts a greater GDP than the UK, Portugal and Greece combined.

Data from the World Population Review for 2025 shows that Germany is the richest country in Europe, with a GDP of $4.74trillion (£3.54trillion).

The UK comes second with $3.84trillion (£2.86trillion), while France is third with $3.21trillion (£2.53trillion), Italy fourth with $2.42trillion (£1.81trillion), and Russia fifth with $2.08trillion (£1.55trillion).

Lower in the table, Portugal sits 18th with $321.44billion (£241billion), and Greece 20th with $267.35billion (£200billion), which means Germany’s GDP exceeds that of the UK and both countries put together.

Germany’s wealth derives from a highly sophisticated and diverse economy. It holds the largest national economy in Europe and one of the most powerful on the entire planet. Germany is also a founding member of the EU and the eurozone, representing nearly a quarter of the whole euro-area economy.

The country is famous for its enormous export sector, standing as the world’s third-biggest exporter, having shipped $1.66trillion (£1.24trillion) worth of goods and services in 2024. It also achieved a trade surplus of $255billion (£191billion), among the largest anywhere in the world.

Its exports include vehicles, machinery, chemicals, electrical equipment, electronic products, pharmaceuticals and plastics, reports the Express.

Germany is likewise Europe’s leading manufacturing powerhouse, accounting for approximately one-third of the continent’s total industrial production.

Germany devotes considerable resources to research and development, allocating roughly 3.1% of its GDP to scientific and technological advancement, while also possessing one of the globe’s most comprehensive social security networks.

According to KPMG, Germany continues to be the world’s third-largest economy in 2026. “Exports of motor vehicles and vehicle parts, as well as chemical products, in particular, have made Germany the world’s third-largest exporting nation. At 70%, the service sector accounts for the largest share of the country’s gross domestic product (GDP).”

As the rally in AI stocks fades, investors were cautious at the open on Friday, with European markets opening to mixed sentiment following steep falls in Asian markets.

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Indices in London and Frankfurt quickly moved into negative territory, with the FTSE 100 dropping nearly 0.4% and the DAX losing 0.3% right after the opening. The Paris CAC 40 and the IBEX 35 in Madrid were both up 0.3%, while Milan’s main index was flat. So was the EURO STOXX 50, a benchmark index of 50 blue-chip companies from the eurozone.

Investors are awaiting the latest US non-farm payrolls report and keeping an eye on developments in the Middle East.

The US job data is important for forecasting what the Fed’s next move could be. Kathleen Brooks, research director at XTB, said in a market note, “There is now a near 40% chance of a rate hike by year-end. We expect financial markets to be extremely sensitive to today’s data,” adding that this will be the first such report with Kevin Warsh as chairman of the Federal Reserve.

In the UK, the latest data from Halifax showed that house prices unexpectedly declined in May. House prices fell 0.1% month on month, but were still up 0.5% year on year, missing expectations for a 1% jump.

Oil markets are awaiting further direction

Oil prices stabilised after falling on Thursday. Brent crude, the international benchmark, was slightly down and traded at $94.73 per barrel at 10:00 CET. It had been trading at about $70 per barrel before the start of the war in late February.

Benchmark US crude was little changed at $92.51 a barrel.

Oil prices remain under pressure as the Strait of Hormuz, a narrow waterway crucial for global oil and natural gas transport, remains effectively closed, and the war-induced energy shock is threatening to slow economic growth and fuel inflation in many countries.

American and Iranian negotiators reached a tentative deal last week to extend their ceasefire, but the agreement has not been finalised. Meanwhile, developments in Lebanon have cast doubt on the prospects for a permanent end to the conflict.

On Thursday, the Iran-backed Lebanese militant group Hezbollah rejected the latest ceasefire agreement between the Lebanese and Israeli governments.

“While there are few signs of progress in US-Iran talks, the oil market continues to trade on expectations of an imminent deal that would resume flows through the Strait of Hormuz,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a report.

Asian markets lose steam as AI craze cools

Wall Street rallied on Thursday after falling oil prices and bond yields eased pressure on US stocks. Banks, small-cap companies and other stocks that had previously been left behind by the euphoria around artificial intelligence led the gains.

Banks also helped lead the market, including gains of 5% for Goldman Sachs, 4.7% for Fifth Third Bancorp and 4.4% for U.S. Bancorp.

They helped to more than make up for losses among some AI stocks, which took a sudden back seat after dominating the market. Analysts have been saying AI stocks may have run too high, becoming too expensive, and that the broader US stock market may be set for a slowdown following an unrelenting streak of nine straight winning weeks for the S&P 500, its longest since 2023.

On Wall Street on Thursday, computer chipmaker Broadcom’s shares sank 12.6% after it issued guidance that fell short of investors’ expectations, raising concerns about the wider AI and technology sector.

US memory chip maker Micron Technology dropped 7.7%, and cybersecurity company CrowdStrike Holdings fell 3.8%.

Still, the benchmark S&P 500 climbed 0.4%, and the Dow Jones Industrial Average gained 1.7% to a record high. The tech-heavy Nasdaq Composite edged 0.1% lower.

But in Asia, investors dumped key AI-related shares, with South Korea’s SK Hynix plunging 8.6% and Samsung Electronics shedding 5.4%.

The Kospi dropped 5.1% to 8,199.44. The index has roughly doubled over the past year, lifted by gains in major technology companies.

Japan’s Nikkei 225 slipped 1.3% to 66,573.85, with technology shares leading the decline, even as official data showed that Japan’s real wages rose for the fourth consecutive month. Chip equipment maker Tokyo Electron’s shares fell 7%.

Hong Kong’s Hang Seng declined 1.2% to 24,948.96, while the Shanghai Composite Index fell 0.3% to 4,045.45.

Australia’s S&P/ASX 200 fell 0.7% to 8,623.50.

Taiwan’s Taiex gave up 1.3%, while India’s Sensex was up 0.1%.

In other trading early on Friday, the US dollar fell to 159.96 Japanese yen from 160.03 yen. The euro was trading at $1.1635, up 0.2%. Gold prices were down 0.3%, trading at around $4,490.70.