The Swiss Market Index slipped 0.13% to 14,321 points on Tuesday, paring earlier gains as global equities came under pressure from rising long-term yields and escalating geopolitical risks in the Middle East.
Pharmaceutical giants Roche and Novartis advanced 1.45% and 1.8%, respectively, outperforming the broader market. Nestlé and Alcon also posted gains, while Swisscom rose 1% after Barclays lifted its price target to 460 CHF from 440 CHF. Defensive sectors provided limited support as the SMI’s broader Mid-Cap Index (SMIM) fell 0.90% to 3,149 points.
Cyclical and construction-related stocks led declines. ABB dropped 3%, Holcim fell 2.2%, Sika slid 2.1%, and Geberit retreated 1.1%. Semiconductor and technology names also came under pressure, with VAT down 4.6%, AMS-Osram down 6.4%, and Inficon and Comet each falling about 4.5%.
Mid-cap performers included Basilea, which surged 10% after reporting a strong first half and raising full-year guidance, and Medartis, which gained 6.4% following its half-year results. Huber+Suhner plunged 11% after margin disappointments in the first semester, while SIG recovered 2.9% after an 18% plunge the prior day amid a leadership change. Ypsomed rose 2.5% on a Barclays target price increase, and PSP Swiss Property dipped 0.8% despite solid half-year results driven by a development project sale.
U.S. equity futures pointed to a weaker open, with Dow Jones Industrial futures down 0.51% near 53,434 points, the S&P 500 down 0.50% to 7,706 points, and the Nasdaq 100 down 1.49% to 29,548 points. Rising yields weighed on tech sentiment, with Nvidia down 2.2% in pre-market trading. Baidu fell nearly 9% after reporting lower-than-expected Q2 profit and weak online marketing sales, while Fabrinet dropped more than 18% on disappointing datacom sales. Home Depot shares rose 2% in pre-market after beating earnings expectations.
Long-term U.S. Treasury yields reached 5.321%, the highest since 2007, while German 10-year Bund yields climbed to 3.248%, the highest since 2011. Japanese 10-year government bond yields hit 2.945%, the highest in three decades. The dollar strengthened against the yen to 159.49, the yuan to 6.7430, and the Swiss franc to 0.8110.
Commodities showed mixed performance. Brent crude oil for October delivery rose 0.32% to $91.23 per barrel, while WTI crude gained 0.7% to $85.06. Gold spot prices eased 0.5% to $4,391.14 per ounce, with December futures down 0.6% to $4,446.70.
European indices also declined, with the Stoxx 600 down 0.6% to 652.63 points, the DAX and CAC 40 each down 0.6%, and the FTSE 100 down 0.2%.
Geopolitical tensions in the Middle East and sustained high long-term yields continued to weigh on investor sentiment, with analysts warning that further escalation could undermine equity valuations. Commerzbank’s Norman Liebke noted that concerns over prolonged oil supply disruptions from the Gulf region remain a key risk, while CG Asset Management’s Emma Moriarty highlighted the dual drag from rising yields and geopolitical instability.
U.S. President Donald Trump reiterated a hardline stance on regional tensions, stating that Oman would face severe consequences if it interfered with shipping through the Strait of Hormuz. Meanwhile, ANZ’s Soni Kumari cautioned that elevated oil prices are likely to keep gold under pressure as long as Middle East risks persist.
