Asian stocks rose as traders doubled down on artificial intelligence trading, ignoring tensions in the Middle East. Even as US President Donald Trump rejected Iran’s latest peace offer, it pushed up crude oil prices and depressed US Treasury bond prices.
The MSCI Asia-Pacific Index rose 0.6%, with technology stocks leading the gains. South Korea, a model for artificial intelligence investment, saw its stock prices climb 5% to a record high. The Bloomberg Asia Chipmakers Index also hit a peak after the Philadelphia Semiconductor Index reached a record high on Friday. However, video game maker Nintendo’s shares dropped as much as 10% in Tokyo after the company issued a warning about rising chip prices.
U.S. stock index futures were steady, after closing at record highs on Friday. Contracts indicated that European stocks were set to open weak.
Despite investors’ optimism towards technology stocks, the development of the situation in the Middle East has put pressure on the overall market. As Trump refused to sign the agreement, the closure of the Strait of Hormuz was effectively prolonged, and the price of Brent crude oil rose by 4.4% to over $105 per barrel. The increase in oil prices has intensified concerns about inflation and also put pressure on the bond market, with the yield on 10-year US Treasury bonds rising by 4 basis points to 4.39%.
The US dollar, as the preferred safe-haven asset during the Middle East conflict, strengthened against all G10 currencies. Due to market expectations that interest rates will remain high, the price of gold dropped to around $4,700 per ounce.
Global stock markets have erased losses caused by the war and climbed to record highs, as investors bet that huge investments in artificial intelligence will boost corporate profits. Asian stock markets have benefited greatly, with traders flocking to the stocks of chipmakers, which are seen as the “cornerstone” of the AI supply chain. Market volatility outside the technology sector has been relatively mild, also indicating that traders are digesting expectations of a final easing of the situation in the Middle East, although the path remains uncertain.
“Since the market decided to move past the peak of war panic, earnings have been the main driver of the market,” said Anna Wu, a cross-asset strategist at Van Eck Associates Corp. “We are seeing that, in the absence of a major escalation of conflict, the market is starting to move past the current war volatility.”
Technical analysis:
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Gold: The US-Iran deal made no progress over the weekend, causing the price to open lower with a gap, but the extent was relatively limited. This is mainly because Trump will visit China in the second half of the week, which may bring changes to the situation. For today, we will continue to focus on sweeping for liquidity at the low level and catching the rebound signal. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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Nasdaq: After the price recaptured the 28,800 level, it accelerated its rise, leaving a potential demand zone at this level. Therefore, a green buy limit operation is set up for the day. Additionally, the liquidity hunting area is at the yellow position. If there is a rebound signal after the sweep, it can also be attempted first. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: On Friday, the price was suppressed in the 95-97 range. However, over the weekend, due to the lack of progress in the agreement, the price rose back above 100. Today, we will continue to observe the selling opportunity during the pullback after the break. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Key economic data and events to focus on today:
22:00 US April NAR seasonally adjusted existing home sales (annualized monthly rate)
