On Monday, Asia stocks experienced a decline as concerns over escalating tensions in the Middle East unsettled financial markets, prompting investors to seek safer investment options. Despite the turmoil in the Middle East following Iran's first-ever military attack on Israel, U.S. futures saw an increase while oil prices dropped. Benchmark U.S. oil decreased to $85.25 a barrel, and Brent crude fell to $90.21 due to lower demand from China and an oversupply in the market.
Market analysts believe that the impact of the recent drone attack on global markets, particularly oil prices and inflation concerns, may be limited. The strategic approach taken by Iran in its response aims to minimize damage rather than escalate tensions, as noted by industry experts.
In trading activities, the U.S. dollar strengthened against the Japanese yen, reaching a 34-year high, while the euro also saw an increase. Major Asian markets experienced declines, with Japan's Nikkei 225 slipping by 1% and Australia's S&P/ASX 200 dropping by 0.6%. South Korea's Kospi and Hong Kong's Hang Seng also recorded losses, while the Shanghai Composite and India's Sensex showed mixed performances.
The retreat in Asian markets followed a decline on Wall Street, where the S&P 500, Dow Jones Industrial Average, and Nasdaq composite all saw losses. JPMorgan Chase, despite reporting strong profits for the first quarter, faced a decline in its stock value due to a conservative forecast for future income growth.
Concerns over interest rates and inflation persist in the market, with traders adjusting their expectations for Federal Reserve rate cuts. The bond market saw a decrease in Treasury yields, while the price of gold rose as investors sought safer assets. Additionally, a report indicating a decline in U.S. consumer sentiment raised worries about the economy's main driver, consumer spending, and inflation expectations.
