Global stocks have rallied, buoyed by fresh AI optimism after Anthropic moved towards a US stock market listing, while oil prices and bond yields fell on renewed hopes of a US-Iran deal.
Brent crude futures dropped more than one per cent to $US94 a barrel on Tuesday, paring the previous session's sharp gains, after US President Donald Trump said talks with Iran were ongoing.
His comments came despite a report that Tehran had suspended indirect negotiations with Washington to end hostilities, keeping investors cautious about efforts to end the three-month war and underlining the fragility of an ongoing ceasefire.
Europe's STOXX 600 was up nearly 0.8 per cent in morning trading as a strong forecast from chipmaker STMicroelectronics lifted technology stocks.
Anthropic said on Monday it had confidentially filed for a US initial public offering, edging ahead of rival OpenAI in a closely watched race to reach public markets.
Google parent Alphabet is also seeking to raise $US80 billion ($A111 billion) in equity to fund the expansion of its AI infrastructure.
"This speaks to the huge sums involved in keeping pace in the AI arms race. It represents a significant shift from a period of bumper free cash flow to going cap in hand to the markets to help fund its expansion," Russ Mould, investment director at AJ Bell, said.
On the macro front, the Institute for Supply Management on Monday said US manufacturing PMI rose to 54.0 in May from 52.7 the previous month, beating expectations to hit a four-year high, likely driven by firms front-loading orders amid rising prices and supply concerns linked to the Iran war.
Futures on the S&P 500 and Nasdaq 100 were down 0.1 per cent, pointing to a slightly weaker open after both indices posted an eighth straight gain and fresh record highs on Monday.
"That marks the first time in a year the S&P has achieved eight consecutive daily gains. And if you look at the moves on a weekly basis, a positive gain this week would be the S&P's 10th consecutive advance, which is something we haven't seen since 1985," Deutsche Bank strategist Jim Reid said.
In Taipei, Nvidia CEO Jensen Huang said the company had enough supply to support strong growth in central processing units and graphics processing units, but acknowledged supply constraints remain a concern.
South Korean equities were volatile, with the benchmark KOSPI swinging sharply lower after hitting a record high as bellwethers such as Samsung Electronics and SK Hynix seesawed.
In currency markets, the dollar was broadly steady.
The euro, still 1.5 per cent below its level at the start of the war, was last at $US1.1643.
Data showed euro zone core inflation rose 2.5 per cent year-on-year in May, above expectations of 2.4 per cent and April's 2.1 per cent.
Money markets price in a quarter-point European Central Bank rate hike this month, with at least one more by year-end.
In bonds, the US 10-year Treasury yield fell 4.4 basis points to 4.43 per cent, while Germany's 10-year Bund yield dropped nearly 6 bps to 2.956 per cent.
Gold rose one per cent to $US4,527 an ounce.
