Markets Shrug Off US Sanctions Plan, Bitcoin Hits New High

Global markets regained their composure on Tuesday following a softer-than-expected US announcement to expand sanctions against Iran. The US Treasury Department stopped short of imposing penalties, which led to a modest overnight pull-back in oil prices and benchmark government bond yields.

The Treasury's warning did not deter investors from taking comfort in the fact that no actual sanctions were implemented. As a result, European shares started 0.3% higher, with defence firms' stocks leading the charge due to expectations of prolonged conflict.

Bitcoin crossed the $80,000 mark for the first time since mid-May, while gold ticked down 0.6% to $4,624 per ounce. The tech sector is holding its breath ahead of Nvidia's results on Wednesday, with analysts expecting quarterly revenue to almost double to around $92 billion.

The US Treasury Secretary Scott Bessent had warned countries on Monday to cut their financial ties with Iran or face secondary sanctions. However, the lack of actual penalties has led to a sense of calm in global markets. The dollar also inched higher against the euro and Japanese yen.