Key events

9m agoBrent crude climbs 1 percent; Guardian review indicates leading oil companies earned $93bn profits during Iran conflict
35m agoPalantir remitted only £2m in corporation tax for the UK in 2024 even with substantial government contracts
1h agoEuropean equities begin the session higher
2h agoIntroduction: Asian markets rise on AI trade recovery despite SpaceX and AMD challenges as oil prices ease

Brent crude climbs 1 percent; Guardian review indicates leading oil companies earned $93bn profits during Iran conflict

Oil values have reversed the prior decline and stand higher for the session.

Brent crude has returned above $80 a barrel, advancing 1 percent to $80.2 a barrel.

Eight of the largest oil producers collected earnings exceeding $90bn (£67bn) over three months as the Iran situation lifted energy costs and emissions-driven climate pressures triggered severe heatwaves.

The sudden gains have renewed demands for oil and gas leaders such as Saudi Aramco and BP to cover environmental harm from profiting during hardship and to support a swift shift toward renewables.

Guardian review showed the eight listed producers recorded nearly $93bn (£69bn) in the quarter ending June, the first complete reporting period after the US-Israeli action on Iran drove global oil prices above $126 a barrel.

Palantir remitted only £2m in corporation tax for the UK in 2024 even with substantial government contracts

Palantir Technologies shares surged 29.5 percent on Tuesday, marking its second-strongest session ever, after the AI firm posted exceptional quarterly figures, according to co-founder and chief executive Alex Karp. The company projected global revenues would nearly double this year to $8bn (£5.95bn).

Ignore market expectations, Karp told CNBC. No firm of comparable size has expanded at even half this rate to my knowledge.

Yet the US software provider paid just £2m in corporation tax in the UK during 2024 despite securing public sector deals worth hundreds of millions, aided by tax reliefs expected to limit payments to governments worldwide for years ahead.

Palantir, which has used AI to win major NHS and Ministry of Defence work, continues to expand rapidly.

Still, its effective tax rate stands at just 1.4 percent globally, based on a Wednesday report from the Centre for International Corporate Tax Accountability and Research.

John Oh, an energy economist at Commonwealth Bank in Australia, noted ship tracking data indicate oil movements through the Strait of Hormuz have remained steadier than initially anticipated, reaching roughly 40 percent to 45 percent of pre-conflict levels last week.

We calculate that traffic only needs to recover to 50 percent to 60 percent of pre-conflict levels to create oversupply in global oil markets.
This accounts for why Brent futures shift quickly into the $70s when markets price in oversupply concerns amid expectations the strait will reopen officially.

European equities begin the session higher

European shares opened higher, aligning with gains in Asia and on Wall Street.

The UK FTSE 100 index advanced 42 points, or 0.4 percent, in early trading to 10,921.

Germany Dax and Italy FTSE MIB each rose about 0.6 percent while France CAC gained 0.1 percent and Spain Ibex added 0.5 percent.

After an earlier decline, oil prices have recovered, though Brent crude remains just below $80 a barrel. It trades 0.8 percent higher at $79.97 a barrel.

Deutsche Bank analysts described the cautious optimism:

Axios reported last night that the US seeks a Wednesday announcement of an interim deal for a 60-day arrangement between Iran and Oman allowing Gulf-bound vessels through Iranian waters and vessels leaving the Gulf through Omani waters without fees. Similar points appeared earlier in the Wall Street Journal, though both accounts leave open whether a longer-term Iran-Oman pact would include tolls for the Strait.
Markets have encountered many false starts in this conflict, so focus will remain on whether an accord is announced soon and its specifics. Investors are increasingly pricing in a resolution.
The semiconductor recovery is accelerating. After a correction exceeding 20 percent in July, investors show greater readiness to return to the AI theme.
Supporting sentiment were Palantir strong outlook at plus 29.45 percent, reports of Anthropic securing a $10bn computing infrastructure agreement, and Caterpillar raising sales guidance while addressing data-centre demand concerns. These factors helped restore confidence in the wider AI spending cycle after July volatility.

The next checkpoint for SpaceX shares arrives on Thursday, when as many as 912m shares owned by staff and early stakeholders become tradable.

James Bull, technology industry senior analyst at RSM UK, commented:

SpaceX first results as a public company exceed many investor expectations. Revenue of $7.8bn came in 15 percent above forecasts and nearly doubled from the prior year, losses narrowed, and the AI unit showed stronger commercial progress than anticipated.
Yet the overall investment outlook remains similar to the June IPO. Starlink stays the main revenue and profit driver, while the loss-making AI segment holds the longer-term potential. The AI business posted $2.6bn in Q2 but still recorded an operating loss of $1.3bn.
These figures demonstrate commercial momentum, but the key test arrives next quarter. The firm continues heavy investment, with capital expenditure above $18bn in the period, much tied to AI infrastructure that will require substantial future revenue to support.
SpaceX indicates that once compute agreements with clients including Google and Anthropic activate, the AI division could reach an annualised revenue run rate of $100bn by December, compared with $3.2bn revenue in 2025. The upcoming results will offer the first view of how rapidly these deals convert into reported revenue.

For the first time since SpaceX became public, the world received a direct view of the trillion-dollar firm financial performance on Tuesday. The Elon Musk-led company reported second-quarter results showing revenue rose 92 percent since June.

SpaceX surpassed Wall Street forecasts with $7.81bn in revenue against predictions of $6.93bn. Despite the growth, the company remains unprofitable, posting a $541m loss compared with a $1bn loss in the same quarter last year.

During an investor call, Musk described it as another milestone year. The SpaceX team is addressing some of the toughest engineering challenges in human history, he said.

SpaceX completed a record initial public offering in June, becoming a $2tn company and briefly making Musk the world first trillionaire. Since then the stock has fallen 24 percent, wiping nearly $500bn from market value.

Shares still declined as investors focused on elevated capital spending.

Sam North, market analyst at trading platform eToro, examined the results closely:

SpaceX produced the type of opening quarter needed to back a $1.75 trillion valuation. Revenue rose 92 percent to $7.8bn, well above expectations, while adjusted EBITDA of $3.5bn came in roughly 70 percent higher than forecasts. The breadth of the outperformance stands out. Connectivity delivered $4.29bn, AI added $2.56bn and the space segment generated $962m. With $100bn in cash and $47.5bn in backlog, SpaceX holds resources to pursue goals that would strain most competitors.
The results do not eliminate the core risk, they increase the stakes. SpaceX still lost $541m, Starlink revenue per user is declining amid global expansion costs, and AI and Starship will keep demanding large capital outlays.
The Nvidia-backed Starmind initiative lends credibility to the orbital-compute concept, yet investors still require evidence it can become profitable rather than remain a costly experiment.
This quarter provides Musk credibility and time, but with the lock-up expiry nearing and shares already below IPO levels, SpaceX must continue delivering strong results to avoid a valuation reset.

Introduction: Asian markets rise on AI trade recovery despite SpaceX and AMD challenges as oil prices ease

Good morning, and welcome to our ongoing coverage of business, financial markets and the global economy.

Technology shares are advancing again after the recent pullback, lifting worldwide equity markets despite difficulties for Elon Musk SpaceX and US chipmaker AMD.

In Asia, Japan Nikkei gained 3.6 percent and South Korea Kospi rose 4.1 percent. Chinese equities also moved up, with the CSI index higher by 1.2 percent.

Brent crude closed below $80 a barrel on Tuesday, and prices eased further today amid hopes for a peace accord. Brent, the global benchmark, is down 0.5 percent at 78.95 a barrel.

Qatar indicated a draft proposal had been shared and US treasury secretary Scott Bessent suggested an agreement to resume shipping could be reached today or tomorrow. Axios reported the US hopes for a Wednesday announcement of an interim deal.

Wall Street indices reached record highs on Tuesday as Caterpillar and Palantir Technologies joined other firms reporting solid profits and crude prices softened. However, AMD dropped 8.8 percent after hours and SpaceX fell 7.5 percent amid concerns over capital expenditure draining cashflow.

The irony is clear, said Stephen Innes, global strategist at Quintex Intel. Wall Street is pursuing the AI trade it recently abandoned.

He added:

The market has reversed its view on AI, yet the risks persist.
Capital expenditure figures remain enormous. Goldman Sachs estimates US technology investment as a share of GDP has already exceeded its late-1990s peak, while the largest cloud and computing firms 2026 spending plans sit almost 50 percent above analyst expectations from six months ago.
A circular element also exists. One hyperscaler capex becomes semiconductor revenue, electrical-equipment supplier backlog and data-centre developer earnings. The infrastructure expansion generates the profits that validate further spending.
This pattern can last longer than critics anticipate, especially when balance sheets stay strong and demand outstrips capacity. Eventually investors must assess how much of current earnings growth reflects lasting end demand versus temporary effects of simultaneous construction.
China introduces another factor. Rapid progress by Alibaba and other Chinese developers narrows the technology gap, though lower-cost models bring mixed effects for US leaders. Cheaper inference may expand adoption while pressuring pricing, proprietary economics and scarcity value.
For now, investors focus on the positive aspects of cheaper AI: broader use, greater compute demand and more infrastructure spending. Pricing pressure and proprietary economics remain issues for later.
Doubt has shifted to an upward chase. July reduced leverage, removed weak positions and compressed valuations. Earnings then showed investors that costly infrastructure need not be unproductive.