Asian stock markets exhibited a mixed performance in subdued trading on Tuesday, reflecting a cooling of recent enthusiasm amid growing uncertainty regarding efforts to resolve the ongoing conflict in Iran. Japan’s Nikkei 225 saw a decline of 0.9%, settling at 71,681.29. Neil Newman, Managing Director and Head of Strategy at Astris Advisory Japan, commented on this development, stating, “We’ve had eight days of strong markets. The market was up for about 12.5%, and now it has cooled off a little bit.”
In Australia, the S&P/ASX 200 inched up by less than 0.1%, reaching 8,822.10, while South Korea’s Kospi faced a significant drop of 2.8%, landing at 8,863.52. Additionally, Hong Kong’s Hang Seng index decreased by 0.4% to 23,678.22, in contrast to the Shanghai Composite, which managed a slight gain of 0.2%, closing at 4,170.58.
On Wall Street, trading remained mixed on Monday, driven by a decline in oil prices and a pullback in major tech stocks. The S&P 500 fell by 0.4%, snapping a positive streak of 11 winning weeks in the last 12 and sits at 1.8% below its record high achieved earlier in the month. The Dow Jones Industrial Average rose by 148 points, or 0.3%, while the Nasdaq composite suffered a drop of 1.3%.
The oil market experienced a notable shift, with prices declining after weekend discussions between the United States and Iran concerning the war. U.S. Vice President JD Vance stated that a promising foundation for a final agreement had been established. A resolution to the conflict could facilitate the reopening of the Strait of Hormuz for oil tankers, potentially allowing full oil deliveries from the Persian Gulf. Despite claims from Iran’s military about closing the strait again, U.S. Central Command has reported otherwise. In early trading, U.S. crude prices rose by 35 cents to $74.21 a barrel, while Brent crude also climbed by 23 cents to $78.13 a barrel.
Treasury yields reflected upward movement, with the yield on the 10-year note increasing to 4.50% from 4.46%. This rise in yields is partly driven by speculation that the Federal Reserve might implement interest rate hikes this year to combat inflation, which has been exacerbated by rising oil prices owing to the Iran war. Economists are anticipating an inflation report due on Thursday, which is expected to show an increase to 4.1% in May from 3.8% in April.
In corporate news, SpaceX’s stock plummeted by 16.4% to $154.60, marking its third consecutive day of losses following a substantial three-day surge after its recent debut on the U.S. stock market where shares were priced at $135. Notably, among the S&P 500’s most substantial decliners were tech giants, with Alphabet, Amazon, and Broadcom declining by 5%, 4.7%, and 4.5% respectively. The S&P 500 ultimately fell by 27.79 points to close at 7,472.79, whereas the Dow Jones gained 148.01 points to settle at 51,712.71, and the Nasdaq composite decreased by 351.33 points to close at 26,166.60.
In currency markets, the U.S. dollar showed slight gains, climbing to 161.60 Japanese yen from 161.52 yen, while the euro edged down to $1.1427 from $1.1431.
