The European trading session saw equities generally recover some ground after a cautious start, with the German DAX leading the charge, up nearly 1%. This rebound was partly attributed to a slight easing in bond yields and a generally more positive market mood despite lingering geopolitical concerns. FTSE 100 however, struggled with UK economic data due later in the session. Gold and silver came under pressure, experiencing significant declines as the US dollar firmed up. Oil prices, Brent and WTI, both saw a healthy bounce, up more than 2%, as recent Middle East developments continued to underpin supply concerns.

As the US market prepares to open, sentiment is cautiously optimistic, largely buoyed by Cisco's impressive earnings report. The tech giant's strong performance, driven by surging AI orders, has provided a much-needed boost to the tech sector, with Nasdaq futures showing notable gains. S&P 500 futures are also marginally higher, suggesting a positive opening. However, the Dow futures are still in the red, indicating a mixed picture across market segments. Key US housing data, including Building Permits, Housing Starts, and the NAHB Housing Market Index, are due shortly after the open, which could provide fresh impulses to the market. Additionally, a speech from an FOMC member later in the session will be closely watched for any hawkish or dovish signals on monetary policy.

The immediate risks for the US session revolve around the incoming US economic data, specifically the housing sector reports. A stronger-than-expected housing market could reinforce inflation concerns and potentially shift interest rate expectations, while weaker data might signal a slowdown. Comments from FOMC member Waller will be scrutinized for any hints on the Federal Reserve's stance on inflation and future rate trajectory. Corporate earnings, notably Home Depot before market open and Toll Brothers/Cava after close, will continue to influence sector-specific movements. Geopolitical tensions remain an underlying risk, particularly impacting commodity prices like oil. Any unexpected shifts in bond yields could also quickly alter market sentiment, especially for growth-oriented tech stocks.