Asian Markets Rise Slightly Amid US-Iran Clashes; Oil Prices Continue Climbing

Asian stock markets opened with modest gains on the back of ongoing US-Iran military exchanges overnight. The US Central Command reported a five-hour wave of strikes targeting Iranian defense systems, missile sites, drones, and naval capabilities. Despite heightened volatility, Tokyo’s Nikkei rose about 0.5%, Hong Kong’s Hang Seng added 0.3%, Shanghai Composite gained 0.4%, and Seoul’s Kospi advanced 0.8%. Concurrently, US futures indicated slight increases.

Oil prices extended their sharp rally from the previous day, with Brent crude trading near $84 per barrel and West Texas Intermediate (WTI) around $79 to $80 per barrel. This surge follows a 9% jump in prices amid geopolitical tensions. Meanwhile, China’s June exports surged 27% year-over-year in dollar terms, surpassing forecasts and marking the strongest growth since October 2021. Imports also rose 36%, the fastest increase since June 2021, resulting in a trade surplus of $125.6 billion.

On Wall Street, major indices closed lower amid the US-Iran escalation and rising oil costs. The Nasdaq dropped 1.5%, the S&P 500 fell 0.8%, and the Dow Jones declined 0.3%. Semiconductor stocks led the declines, with South Korean SK Hynix plunging over 15% in Seoul after a recent IPO spike. Other chipmakers including Nvidia, AMD, Intel, and TSMC also fell. The memory sector ETF DRAM dropped about 10%. US bank stocks weakened ahead of quarterly earnings reports, while energy producers like Chevron and ExxonMobil gained on higher oil prices.

SpaceX shares fell to $139, near their IPO price, after a rapid post-IPO surge erased over a trillion dollars in market value within a month. Analysts noted this reflects a normalization rather than a crisis. The second-quarter earnings season is ramping up, with expectations for nearly 21% annual earnings growth for S&P 500 companies, though some caution about potential challenges due to inflation uncertainties.

In macroeconomic news, the US Consumer Price Index for June is expected to show a slight 0.1% decline, with annual inflation dropping below 4%, but core inflation may rise 0.3%, keeping Federal Reserve concerns alive. Fed officials signaled readiness to tighten monetary policy if inflation surprises on the upside. The dollar strengthened globally as investors sought safe havens, while the Israeli shekel weakened against the dollar. Gold prices fell over 2% amid the stronger dollar but showed some recovery.

In tech, Apple’s stock hit a record high after Citi raised its price target to $365, citing strong brand loyalty and expected price increases for upcoming iPhone models. The company’s market value stands at about $4.66 trillion, second only to Nvidia. The report also highlighted an anticipated foldable iPhone launch in Q4 as a potential catalyst.