A look at the day ahead in European and global markets

By Rae Wee, Correspondent

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U.S. President Donald Trump's operation "Project Freedom" hasn't got off to a promising start.

Sure, Maersk's U.S.-flagged vehicle carrier Alliance Fairfax might have exited the Gulf via the Strait of Hormuz accompanied by U.S. military assets.

But several merchant ships in the Gulf also reported explosions or fires, the U.S. said it had destroyed six small Iranian military boats, and an oil port in the United Arab Emirates, which hosts a large U.S. military base, was set ablaze by Iranian missiles.

Seoul's Foreign Ministry, meanwhile, said that authorities would investigate the cause of a fire on a South Korean-operated ship in the Strait.

All that and shipping in the Strait of Hormuz remains largely at a standstill.

Vessels in the Strait of Hormuz near Bandar Abbas, Iran, May 4, 2026. Amirhosein Khorgooi/ISNA/WANA (West Asia News Agency) via REUTERS

The fragility of the U.S.-Iran truce left markets in a precarious mood on Tuesday, with stocks in Asia falling and oil prices holding well above $100 a barrel.

Australia's Westpac Banking Corp was the latest lender to warn about the risks stemming from the Middle East conflict as it reported lower-than-expected first-half profit.

As the global energy shock drags on, the pain is becoming increasingly costly for governments in Asia, who are scrambling to find alternative fuel sources and insulate their economies from the worst of the crisis.

Philippine annual inflation accelerated to a three-year high in April, data on Tuesday showed, as a surge in fuel prices raised the chance of more policy tightening.

Graphics are produced by Reuters

Geopolitics aside, the earnings season is also in full swing, with chip giant AMD and pharmaceutical firm Pfizer among those set to release results later in the day.

Data from S&P Global Market Intelligence showed 83% of S&P 500 companies that have already reported have beaten EPS estimates and 78.2% have exceeded revenue estimates.

A slew of central bankers across the Bank of England, the European Central Bank and the Federal Reserve are also due to speak across various events, on the heels of last week's policy meetings that saw several turn more hawkish.