MARKET WRAPS

European shares were mostly lower Tuesday as prospects for a near-term peace deal to reopen the Strait of Hormuz faded.

"President Trump indicated little interest in extending the expired agreement with Iran, while major differences remain over Hormuz," MUFG said.

A global bond selloff deepened and oil prices held above $91 a barrel in early European trade.

The prospect of higher-for-longer oil prices added to sustained upward pressure on borrowing costs.

"The front end [short-term bond yields] has been more anchored by softer U.S. data and reduced expectations for a September hike, but the long end is being driven by a tougher combination of fiscal supply, term premium, inflation risk and oil," Tickmill Group said.

In the U.K., unemployment was unchanged in the three months through June, while wage growth edged up slightly, likely not moving the dial for Bank of England policymakers.

Money markets continued to price 60 basis points of BOE rate rises into next year, according to LSEG data.

U.S. Markets:

Stock futures were lower as chip stock momentum stalled. For the day ahead, industrial production and housing starts data for July are among key releases.

Forex:

The euro rose.

Sterling could extend its losses after the U.K. jobs data suggested little impetus for the Bank of England to raise interest rates this year, ING said.

The dollar recovered slightly as oil prices rose after Trump said he wasn't seeking an extension of the ceasefire with Iran which expired Monday.

Bonds:

The 10-year Bund yield rose to a 15-year high in opening trade, as eurozone government bond yields increased together with Treasury yields.

Rising U.S. government spending, pointing to a challenging fiscal outlook, was a key factor behind higher yields.

The 30-year Treasury yield extended its recent rise, climbing to its highest level since 2007, according to Tradeweb data.

The 10-year yield also rose, hitting its highest level since end-July.

The two- to 10-year Treasury yield curve had scope to steepen further in the next three months, potentially to 70 basis points, DZ Bank said.

Energy:

In early European trading, Brent crude was up 0.1%, while WTI futures gained 0.5%.

Metals:

Gold prices slipped, pressured by higher oil prices and higher Treasury yields.

"Gold has nevertheless remained supported by renewed investor demand and stronger central-bank purchases, particularly from China," MUFG said.

Iron ore

Iron ore was steady.

Oversupply pressures were likely to intensify due to rising supplies from Australia and Brazil as well as new sources, ANZ Research said.

EMEA HEADLINES

Why Trump Is Threatening Again to Bomb Oman

WASHINGTON-The White House for weeks promised that Iran was close to signing a nuclear deal and that Oman could be helpful in reopening the Strait of Hormuz. The tiny Gulf nation suddenly found itself at the center of the effort to end the war.

This deal, however, has proved elusive. And President Trump's frustration with this standoff prompted him to threaten to bomb Oman on Monday, as he alleged the country might be standing in the way of an agreement.

Frasers Group Increases Hugo Boss Stake to 48% After Offer Period

Frasers Group said it now holds almost 48% of shares in Hugo Boss, after the acceptance period for its offer ended on Thursday.

The British retail company, founded by Mike Ashley, said Tuesday that it received acceptances for 12.2 million Hugo Boss shares, or about 17.62% of the German company.

BHP Annual Profit Rises on Record Copper Prices

BHP Group reported a 9% increase in annual net profit and an even bigger gain in underlying earnings as prices of copper, now its main profit engine, surged to record highs.

Australia-based BHP, the world's biggest miner by market value, on Tuesday reported a net profit of $9.83 billion for the 12 months through June, up from $9.02 billion the year prior. A previously announced $2.3 billion write-down of a potash project in Canada weighed on its bottom line.

GLOBAL NEWS

Diesel Buyers Compete for Shrinking Supply Pool

Diesel buyers are competing for shrinking supply amid disruptions in Russia and the Middle East, with the U.S. at the center of a scramble that could intensify into the winter.

The squeeze across the global refined-product markets, where gasoline, diesel and jet fuel compete for the same refinery capacity, is pushing prices higher.

Unitree IPO Could Mark New Era for China's Robotics Sector

A coming listing by humanoid-robot startup Unitree could unleash a fundraising frenzy across China's robotics sector, with the debut serving as a key test of market appetite.

Hangzhou-based Unitree-officially known as Yushu Technology-is set to become the first humanoid-robotics company to trade on the mainland when it goes public on Shanghai's Nasdaq-like STAR Market on Wednesday.

The AI Trade Had 1 Sure Bet. Now Even That's Gone.

The tech pair trade that saw investors go long chips and short software lit up the stock market for much of 2026. Now it's on life support.

Through the end of June, the iShares Semiconductor ETF was up 113% while the iShares Expanded Tech-Software Sector ETF fell 14%. In July, though, the chip ETF tumbled 21%, while software rose 4.4%. That one-month move led to the sudden unwinding of once little-known hedge fund Situational Awareness, which had made heavily leveraged bets on the pair trade

Iran-Backed Houthis Threaten Coast Along Red Sea Chokepoint

Yemen's Iranian-allied Houthi rebels are escalating attacks along the country's Red Sea coast, shutting down operations at a strategic seaport and pushing closer to the Bab al-Mandeb Strait, an important global shipping chokepoint.

The militant group's recent missile and drone attacks forced the closure of the port of Mokha, a key logistics hub for civilian shipping and for anti-Houthi forces operating along the coast, Yemeni authorities said.

Trump Administration Pauses Construction in Texas' Big Bend National Park

Construction work in Big Bend National Park has been temporarily halted, U.S. Customs and Border Protection Commissioner Rodney Scott said Monday, while he assesses the southwest Texas site.

Scott said CBP would pause its projects in the national park as he conducts a "personal, on-the-ground evaluation." His agency had earlier awarded contracts for construction in the Big Bend area that sparked concerns the administration was building a wall that could damage the environment.

Trump Says Israel Should Stop Striking Gaza

TEL AVIV-President Trump said Israel shouldn't be striking targets in Gaza, as his envoy Jared Kushner met Monday with Israeli Prime Minister Benjamin Netanyahu to salvage the president's floundering plan to disarm Hamas and end the war in the Palestinian enclave.

In a rare public break between the close allies, Netanyahu last week rejected Trump's plan for a phased disarmament by Hamas. After a brief pause, Israel resumed near-daily strikes against Palestinian militants, including some that Israel says took part in the Oct. 7, 2023, attack and hostage taking.

Write to priscila.barrera@wsj.com