Morning Bid: Ceasefire? What ceasefire?

A look at the day ahead in European and global markets from Ankur Banerjee

And just like that, we're back to staring at shipping routes across the Strait of Hormuz after a fresh bout of tit-for-tat attacks upended the tenuous U.S.-Iran ceasefire and clouded long-term peace prospects in the Middle East.

While global markets broadly took the latest U.S. attacks on Iran in stride, oil prices rose 2% as investors fretted about a slower recovery of supply from the Middle East. Adding to those worries, the U.S. reimposed crude sales sanctions on Iran.

The Strait of Hormuz, a key waterway for the transport of Middle Eastern oil shipments to wider markets, remains in focus, as it has been since the conflict erupted at the end of February.

But for now, investors are hoping that the worst is truly behind us and the gains in Brent crude futures will be contained. Stocks mostly took a breather after an AI-led wild ride in recent weeks, as investors brace for the earnings season.

U.S. 10-year Treasury yields, which rise when prices fall, climbed about 3 basis points to a one-month high of 4.565%, with higher oil prices raising inflation risks. [US/]

Focus will be on the minutes of the Federal Reserve's June policy meeting later on Wednesday as traders gauge the mood and tone of policymakers. Markets are pricing in the Fed to hike at least once by the end of 2026 to battle inflation.

The spotlight will also be on tech stocks after a tumultuous few weeks where the afterglow of the blockbuster IPO of SpaceX has given way to worries about whether there is room for further gains in the historic AI rally.

South Korea's SK Hynix launched a U.S. share sale to raise 43 trillion won on Monday, with the stock due to start trading on Friday, in what will be another test of investor confidence in the sector.

The KOSPI index dropped another 5%, leading to a short halt in trading activated by the stock exchange. These halts are becoming increasingly common, underlining the unprecedented level of volatility in the world's best performing stock market.

Key developments that could influence markets on Wednesday:

• UK housing survey for June

• Federal Reserve minutes during US hours

(By Ankur Banerjee; Editing by Sonali Paul)