Macro Update
Oil sinks further as Trump delays fresh Iran strikes: Brent crude fell 1% to $91.56 a barrel, its lowest level since early September, extending Monday’s 5.85% slide after Trump said he would postpone further military strikes against Iran following appeals from regional leaders. Brent is now around 22% below its six-month high of $118 reached on 30 October, although the US naval blockade in the Strait of Hormuz remains in place.
Wall Street rebounds sharply as cheaper oil eases inflation fears: The S&P 500 jumped 2.35% to 7,549.94, its biggest one-day gain since 8 April, while the Nasdaq rose 2.74% and the Dow gained 2.15% to 52,389.75. All 11 S&P sectors advanced, while the Philadelphia Semiconductor Index surged 6.9% after plunging 12% last week, led by AMD and Broadcom, which gained 13.3% and 8.8% respectively.
Nvidia drops as scrutiny of AI trade intensifies: Nvidia fell 4.2% to its lowest closing level since 7 April after its board said it was investigating whether chief executive Jensen Huang had been targeted by a foreign intelligence operation. Investors were also awaiting CoreWeave’s results this week, while Anthropic was expected to begin an IPO roadshow that could raise nearly $70bn.
Asian technology shares bounce as risk appetite returns: Japan’s Nikkei climbed 2.87%, recovering Friday’s near-6% decline, with SoftBank jumping 13.88% and Tokyo Electron rising 6.05%. South Korea’s KOSPI gained 4%, while MSCI’s Asia-Pacific index advanced 1.5% from last week’s seven-month low and European stock futures pointed 0.7% higher.
Dollar holds steady as markets await US inflation data: The dollar stabilised in Asian trading after falling on Monday, when the euro rose 0.7% to $1.1220. Sterling traded at $1.3441 following the Bank of England’s first rate increase in three years last week, while the yen hovered around 158 per dollar and the Australian dollar stood at $0.6918.
Markets turn to CPI after oil-driven relief rally: Investors shifted their focus to upcoming US inflation data as lower crude prices eased concerns over renewed price pressures and helped support risk assets. The softer oil market has also reinforced expectations that the Federal Reserve may have greater scope to adjust interest rates if inflation continues to moderate.