US equity futures pointed to a lower open on Tuesday, with Dow Jones contracts down 0.25% and Nasdaq futures off 0.1%. The Swiss SMI ultimately closed 1.3% lower, while the broad SPI index dropped 1.17% to 19,310.24 points.
European gas futures eased 1.5% to 80.80 euros per megawatt-hour after hitting a four-year high, supported by increased Norwegian gas deliveries and stronger wind and solar generation. However, EU gas storage stands at 68.2%—16.2 percentage points below the five-year average—and supply remains tight, analysts at Mind Energy noted, citing Middle East tensions and globally scarce liquefied natural gas amid lagging storage expansion.
A 24-hour strike at a French LNG terminal was being partly absorbed by terminals in the Netherlands and Belgium, according to LSEG analyst Dzmitry Dauhalevich.
Geopolitical risk continued to dominate. The Iranian Revolutionary Guards reported that an oil tanker had struck a sea mine and caught fire in the Strait of Hormuz; the US military disputed the characterization. New attacks on Saudi Arabia and the shutdown of a key east-west pipeline added to supply concerns, pushing Brent crude above $107 a barrel.
In fixed income, the yield on ten-year US Treasuries climbed to 5.041%, the highest level since 2007, adding pressure on rate-sensitive sectors. Investors also looked ahead to the Federal Reserve's policy meeting on Wednesday, where a 25-basis-point rate hike is widely expected.
The banking sector came under fresh pressure after Bank of America CEO Brian Moynihan told the Barclays global financial-services conference that investment-banking fees could fall at least 10% in the third quarter, with sales-and-trading revenue expected flat. "What we're seeing is the investment-banking market overall down about 10%," Moynihan said. Andreas Lipkow of CMC Markets said Moynihan's remarks were "sweeping through the international banking scene" and highlighted shrinking growth prospects for investment banks and asset managers.
Deutsche Bank shares fell more than 4% intraday, with subsidiary DWS dropping nearly 5%. UBS slid as much as 5.8%, making it the worst performer in the SMI Blue-Chip index, later settling down 4.2%. Partners Group fell 3.6% to a multi-year low; Julius Bär and Swissquote declined 2.9% and 2.5% respectively. Regulatory concerns ahead of upcoming political discussions were also cited for UBS's weakness.
Among the remaining blue chips, Nestlé fell 1.6%, Roche 1.2%, and Novartis 0.5%, unable to prop up the index. Defensive names fared better: Swisscom rose 0.3%, Zurich 0.2%, and Swiss Re 0.4%, benefiting from sector rotation. AXA's recent signal of continued sustainable earnings growth in insurance provided additional support.
On the corporate side, Bioversys surged 5.2% after Citigroup raised its price target, while newly listed Centiel gained 3.2% on plans to expand capacity through a production facility in Muzzano. Medacta dropped 4% after Deutsche Bank assigned a "Hold" rating, noting that prior years' exceptional growth rates were unlikely to persist, and SMG fell 5.1% following shareholding changes—the Mobiliar reduced its stake while TX Group increased its holding.
Tech and semiconductor stocks extended losses, with Swissquote citing slower development of leading AI models as a potential drag on data-center, chip and infrastructure investment. Huber+Suhner and Belimo, both linked to data-center buildout, slipped slightly, unable to recoup Monday's declines.
