Stocks in Europe and the US reversed course to trade higher on Tuesday as oil prices dropped after US President Donald Trump said Washington would stop $4 billion in funding to Israel after the end of this year.
Speaking to Fox News' Fox and Friends, Trump said Israel no longer needed the funding. He had made a deal with Israeli Prime Minister Benjamin Netanyahu to stop the aid, he said.
The comments sent oil prices lower and helped stocks reverse their losses. The pan-European STOXX 600 index rose 0.13% to 650.3 points, while futures tracking the benchmark S&P 500 index added 0.14%.
The gains offered some relief after a fresh bout of AI anxiety unnerved investors, who are also on tenterhooks as voting began in crucial US midterm elections.
Opinion polls show the Democrats are likely to take the House, while the Senate is too close to call. A sweep by Democrats could lead to tougher oversight of AI and more corporate regulation.