Stocks rise as oil climbs and technology shares rebound

Stock markets rose on Tuesday as technology shares continued to recover, while oil prices climbed after Iran targeted US radar and air defence installations in the Gulf.

International benchmark Brent crude reached $91.99 per barrel, its highest level since mid-June, before reducing some of its gains. Around 1530 GMT, Brent was up 1.7 percent at $90.72 per barrel and West Texas Intermediate was up 1.7 percent at $83.91.

Chris Beauchamp, chief market analyst at IG, said traders had seen the unusual combination of oil prices, equities and precious metals rising at the same time. Sucden brokers said oil remained the key macroeconomic anchor and expected markets to remain driven by headlines in the near term.

Iran stepped up attacks in the Middle East two weeks after its war with the United States resumed. Iran's Revolutionary Guards said they had attacked and stopped two non-compliant oil tankers attempting to transit the Hormuz Strait. Tehran has blockaded the strait, through which a fifth of the world's oil supplies transited before the war, to avenge the US-Israeli attack that started the war on February 28.

Iran's Yemeni allies, the Houthis, have threatened to blockade Saudi Arabia's ports, which would cut off supplies Saudi Arabia has been shipping through the Red Sea. US President Donald Trump said he would take care of the Houthi rebels if they followed through on the threatened blockade.

Higher oil prices did not weigh on stock trading as they often do. Investors returned to technology shares and watched second-quarter earnings reports. Technology stocks have recently suffered sharp falls as investors worried about high valuations in the artificial intelligence sector, with chipmakers leading a sell-off last week. Wall Street's tech-heavy Nasdaq index was on track to close higher for a second straight day, with semiconductor stocks leading gains.

The technology rebound faces tests from earnings reports due from Tesla and Alphabet in the coming days, followed by Microsoft, Meta, Apple and Amazon next week. Stephen Innes of SPI Asset Management said Big Tech earnings now needed to show that artificial intelligence revenue, margins and cash flow could justify large investment in AI infrastructure. Bret Kenwell at eToro said investors wanted growth and guidance strong enough to justify elevated valuations.

European stock markets closed higher. London's FTSE 100 rose 0.6 percent to 10,585.91, Paris's CAC 40 gained 0.3 percent to 8,363.14 and Frankfurt's DAX rose 0.7 percent to 25,011.35. Dan Coatsworth of AJ Bell said John Healey's surprise appointment as finance minister had not troubled markets because he was seen as a safe pair of hands. Investors watched British bond yields after new Prime Minister Andy Burnham said he would cut taxes on household electricity bills. UK bond yields edged higher and the pound fell.

General Motors raised its full-year profit forecast after reporting quarterly profits of $1.3 billion, down 31 percent from a year earlier. North American auto sales fell during the period, but GM's results topped analyst estimates on strong pricing, according to an earnings release. GM shares rose nearly five percent.

Around 1530 GMT, the Dow was up 0.7 percent at 52,190.75, the S&P 500 was up 0.8 percent at 7,504.31 and the Nasdaq Composite was up 1.3 percent at 25,842.63. Tokyo's Nikkei 225 closed up 3.3 percent at 66,232.19, Hong Kong's Hang Seng was flat at 25,132.29 and Shanghai's Composite closed up 1.8 percent at 3,864.37. The euro was down at $1.1409, the pound was down at $1.3378, the euro rose to 85.30 pence and the dollar rose to 162.97 yen.