Asian Stocks Climb, Oil Surges on Iran Unrest, US Jobs Data Boost
Overview
Asian markets opened higher, tracking U.S. gains driven by record highs on the S&P500 and benign jobs data. Oil prices surged as protests intensified in Iran, raising energy supply concerns. The dollar saw a slight dip following Fed Chair Powell's testimony remarks. Taiwan Semiconductor Manufacturing Co.'s strong revenue offers support for regional tech stocks.
Asian markets opened in positive territory Monday, extending a global rally fueled by U.S. equity gains and robust economic data. The S&P500 closed at a record high Friday, supported by employment figures showing a cooling labor market. Meanwhile, oil prices climbed sharply as intensified protests in Iran raised concerns over regional stability and potential supply disruptions.
U.S. Market Influence
U.S. equity futures saw a slight retreat in early Asian trading after the S&P500 notched a 0.6% gain on Friday. The rally was largely attributed to U.S. jobs data, which revealed fewer jobs added than forecast, alongside a dip in the jobless rate to 4.4%. This data has tempered expectations for aggressive Federal Reserve rate cuts, with major banks like Morgan Stanley and Barclays pushing back their forecasts for Fed rate reductions into late 2026. The U.S. Supreme Court's decision to defer rulings on President Trump's tariffs also removed a near-term market risk.
Oil Prices Surge on Iran Unrest
Crude oil prices advanced Monday, marking an extension of their longest weekly gain streak since June. The escalation of protests across Iran has heightened fears of potential geopolitical instability, which could disrupt energy markets. The situation remains tense, with the U.S. and Iran exchanging threats regarding potential repercussions for demonstrators or intervention.
Regional Tech Support
Taiwan Semiconductor Manufacturing Co. (TSMC) provided a boost to Asian tech shares by reporting revenue late last week that surpassed analyst estimates. This performance offers renewed support for the artificial intelligence trade within the region, signaling continued demand in key technology sectors.
Other Market Factors
The U.S. dollar weakened slightly in Asian trading following remarks from Federal Reserve Chair Jerome Powell, who confirmed the central bank received grand jury subpoenas related to his congressional testimony on renovations. In broader market sentiment, global investors are navigating geopolitical uncertainties from Caracas to Tehran, alongside questions about the sustainability of U.S. mega-cap tech dominance. G-7 finance ministers are set to convene in Washington to discuss rare earths, and several Federal Reserve officials are scheduled to speak later in the week. Precious metals saw modest gains as traders anticipated a higher gold price.
