A global rally in artificial intelligence-linked stocks stalled in early European trade, while oil prices reversed course to fall on rising hopes for a diplomatic settlement to reopen the Strait of Hormuz.

Nasdaq futures were flat after the index closed at a new record high Monday, spurred by enthusiasm around Meta's new consumer-focused AI product. Excitement about a broadening of demand for the chips and data centers that power AI saw gains of 10% and 14% respectively for chip makers AMD and Intel in the last session.

"Investors are again willing to price ongoing AI investment as a structural demand driver for semiconductors, cloud infrastructure and high-performance computing," said Patrick Munnelly, market strategist at brokerage Tickmill Group.

But that enthusiasm waned in Asian trade, with Korean chip giant Samsung Electronics rising only 0.9%, while peer SK Hynix lost 1.5%. European tech stocks also lost momentum, with ASML nudging up just 0.1%. Europe's Stoxx 600 went sideways, losing 0.1%. Futures for the Dow Jones Industrial Average and the S&P 500 pared losses earlier in the European morning to trade flat.

Oil dramatically changed course in the European morning. After rising by close to 2% to trade close to $102 a barrel, Brent crude oil contracts fell over 1% to trade near $99. WTI contracts also changed course, falling by more than 1% to trade below $94 a barrel. Investors are increasingly optimistic that U.S.-Iran talks will progress, as diplomats from both countries gather in New York for the UN General Assembly.

In fixed income, Treasury yields continued to move in lock step with oil prices. Ten-year Treasury yields fell 1.1 basis points to 4.945%, while 30-year yields fell below 5.300%. Eurozone government bond yields also slipped, while yields on U.K. government bonds climbed after the rate of public borrowing jumped in August. Ten-year gilt yields trade at around 5.250%.

The dollar continued to strengthen against the yen, with one dollar trading above 157.70 yen. Traders are responding to the Bank of Japan rate hike last week that turned out less hawkish than expected, while expectations for further U.S. Federal Reserve hikes strengthen the greenback.

Bitcoin pulled back from its highs in the last session but held at around $85,800. New York gold contracts continued to tread water, falling slightly to around $4,340 a troy ounce.

Japanese markets are closed for holidays until Thursday.

President Trump will address the United Nation's General Assembly later Tuesday, with markets carefully watching his words for their impact on oil prices. Eurozone investors will watch for political developments in Germany, as the leadership of Chancellor Friedrich Merz comes under increased pressure.