Ceasefire at risk of collapse

Hello, this is Leonie Kidd writing to you from London. Welcome to another edition of CNBC’s Daily Open.

The fragile ceasefire in the Middle East is facing its biggest test, with a dramatic escalation in attacks from Iran overnight. For now, it seems investors are unsure how to trade the latest developments.

There is still a raft of earnings to dissect, with big banking names in Europe and technology and media stocks in the U.S. leading the reporting charge.

With the U.K. returning from a long weekend, and a slew of markets still closed in Asia, expect an unusual session as certain markets play catch-up.

An already shaky ceasefire between the United States and Iran appeared to be on the verge of collapse Monday, as the United Arab Emirates came under attack from Iranian drones and missiles and the U.S. said it sank Iranian boats in the Strait of Hormuz.

U.S. President Donald Trump, in a Fox News interview late Monday, warned Iran that it will be “blown off the face of the earth” if it targets U.S. ships that are protecting commercial vessels transiting the strait.

Trump also said in a Truth Social post that a South Korean cargo ship had come under fire from Iran in the waterway. “Perhaps it’s time for South Korea to come and join the mission!” Trump wrote in the post.

So far today, the market reaction has been muted, with mixed trading for stocks across Asia, European equities called to open lower, while stateside futures are little changed after falling across the board on Monday.

But signs of stress are being seen, as Australia’s central bank on Tuesday raised its policy rate to 4.35%, its highest level since December 2024, amid elevated inflation.

In its release, the RBA said that inflation had picked up materially in the second half of 2025, and that the conflict in the Middle East had led to sharply higher fuel and related commodity prices, further adding to inflation. 

In earnings news, HSBC has missed expectations for first quarter pre-tax profit on the back of higher expected credit losses and other impairment charges. Speaking to CNBC’s “Access Middle East,” the bank’s Chief Financial Officer Pam Kaur said it was still reiterating its targets for 2026, 2027 and 2028.

Meanwhile, Italian banking giant Unicredit has beaten its own forecasts with a 16% rise in net profit and a 5% jump in revenue for the first quarter.

In the U.S., it was Palantir, Paramount and Pinterest that led the reporting slate overnight. Palantir topped estimates with 85% revenue growth, its fastest expansion since its market debut in 2020. Paramount earnings and revenue also beat forecasts, as the media group’s streaming business offered a boost. And Pinterest shares surged over 15% on a strong quarter and bullish guidance from the social media company.

— Leonie Kidd

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