Asian stock markets stabilized after their steepest drop since March, as tensions in the Middle East eased and the sell-off in artificial intelligence stocks subsided.
The MSCI Asia-Pacific Index rose 0.7%, ending a three-day losing streak driven by expectations of Federal Reserve rate hikes. South Korea’s stock market narrowed its gains to 1.9% after low-end buying returned.
Despite a rise in the stock market, caution remained prevalent, with Nasdaq 100 index futures down 0.3%. U.S. Treasury prices declined, pushing the benchmark 10-year Treasury yield up by one basis point to 4.57%.
Brent crude prices fell 0.4% to just below $94 a barrel after Iran and Israel pledged to ease airstrikes threatening Middle East peace talks. Gold prices dipped slightly by 0.1% to around $4,325 an ounce.
After a brief interruption that pushed the market to record highs, investors are cautiously returning to the stock market, anticipating further upside in the bull run driven by corporate profits. Market sentiment has improved as geopolitical tensions ease, reducing concerns over inflation and rising interest rates triggered by higher oil prices.
Mike Wilson of Morgan Stanley said, “Since the March lows, the market has rarely fluctuated so rapidly in a straight line.” He maintained his optimistic outlook on the market, citing earnings and strong economic data as supporting factors. “If this bull run is to extend into year-end, a pullback is inevitable—and ultimately healthy.”
Meanwhile, Iran and Israel agreed to reduce attacks on each other after escalating violence threatened peace talks and prompted President Donald Trump to call for de-escalation.
Israeli Prime Minister Netanyahu said in a televised address on Monday that Israel would temporarily suspend its military operations against Iran, but would respond if Tehran launched another attack. Earlier, local TV station N12 reported that Israel’s airstrikes against Iran-backed Hezbollah militants in southern Lebanon would continue at full force.
Iran had previously announced a halt to its military operations against Israel. However, according to the semi-official Fars News Agency, Iran’s Central Military Command warned that if Israel continues its attacks, including in southern Lebanon, “more severe and destructive measures than before will be taken.”
Technical Analysis:
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Gold: After testing the 4,280 level yesterday and rebounding, prices are expected to remain range-bound today due to a lack of major data releases. Market sentiment has also eased following the pause in hostilities between Iran and Israel. Therefore, we anticipate limited movement today, with trading opportunities primarily focusing on counter-trend moves after liquidity sweeps. For detailed positioning, please consult the plugin.
(Gold 15-minute chart)
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Nasdaq: Prices rebounded overnight in a corrective move, then entered consolidation later in the night. Today, we will primarily focus on the rebound signals following liquidity sweeps around 29,000/29,100. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Prices retreated after continuing to sweep through the yellow zone we previously highlighted in our plugin alert, falling from above 96 to around 91. We recommend locking in most profits for short positions. For today, we will continue waiting for shorting opportunities; traders can consider entering when prices reverse after a liquidity sweep above 93. For detailed positioning, please consult the plugin.
(Crude Oil 15-minute Chart)
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Today’s key financial data and events to watch:
22:00 U.S. May NAR Seasonally Adjusted Existing Home Sales (Annualized Monthly Rate)
