Asian markets experienced notable downturns on Monday, influenced by a significant decline in Big Tech stocks on Wall Street and a surge in oil prices due to geopolitical tensions. Japan’s Nikkei 225 index fell by 4.2%, closing at 63,804.77, after the Japanese government revised its economic growth forecast for the first quarter to 1.8%, down from an earlier 2.1% estimate.
Geopolitical Tensions Impact Oil Prices
The rise in oil prices was triggered by Israel’s airstrikes on central and western Iran in response to missile fire. This escalation comes as American and Iranian negotiators had reached a tentative ceasefire agreement, which remains unfinalized. Brent crude oil prices rose by $3.50 to $96.59 per barrel, while U.S. crude increased by $3.48 to $94.02 per barrel.
In South Korea, the Kospi index dropped 6.8% to 7,605.42, with major companies like Samsung Electronics and SK Hynix experiencing declines of 7% and 3.3%, respectively. Taiwan’s Taiex and Hong Kong’s Hang Seng indices also saw losses, with decreases of 3.8% and 1.3%, respectively. The Shanghai Composite index fell by 1.1% to 3,984.75. Trading in Australia was closed due to the King’s Birthday holiday.
U.S. Market Influences
On Wall Street, the S&P 500 recorded a 2.6% drop, marking its largest one-day decline since October. This was prompted by a strong jobs report that heightened expectations of a potential Federal Reserve interest rate hike. The Dow Jones Industrial Average and the Nasdaq composite also saw declines of 1.4% and 4.2%, respectively.
Bond yields increased following the jobs report, which revealed a surprising addition of 172,000 jobs in May. The yield on the 10-year Treasury rose to 4.54%, while the 2-year Treasury yield increased to 4.16%. The Federal Reserve has been maintaining steady interest rates while assessing the impact of rising inflation, exacerbated by tariffs and the ongoing U.S.-Iran conflict affecting oil shipments through the Strait of Hormuz.
In currency markets, the U.S. dollar slightly increased against the Japanese yen, moving from 160.25 yen to 160.35 yen. The euro also saw a minor rise, costing $1.1530 compared to $1.1515 previously.
Original reporting: KTBS 3 (Shreveport) — read the source article.
