Asian stock markets declined sharply on Monday amid escalating geopolitical uncertainty fueled by the Russia-Ukraine conflict and renewed US-China trade tensions. Hong Kong’s Hang Seng Index plunged over 2%, reflecting investor concerns as Beijing and Washington exchanged strong accusations over trade violations. US President Donald Trump’s announcement to double tariffs on steel and aluminum imports to 50% intensified worries, exacerbating market sentiment. Mainland China’s markets remained closed for a public holiday, adding to the subdued regional trading atmosphere.
Highlights:
Hang Seng dropped more than 2% amid US-China tariff disputes
Trump announced doubling of steel and aluminum tariffs to 50%
China’s factory activity contracted in May, though less than April
Mainland China markets closed for public holiday
Oil Prices Surge on OPEC+ Production Increase Amid Global Uncertainty
Oil prices rallied strongly as OPEC+ announced a third consecutive monthly increase in output starting July. The modest supply boost was overshadowed by heightened geopolitical risks including the Russia-Ukraine conflict. US benchmark crude oil rose $1.60 to $62.39 per barrel, while Brent crude climbed $1.41 to $64.19 per barrel, driven by supply concerns and sustained geopolitical tensions.
Highlights:
OPEC+ approved third straight monthly production increase beginning July
US crude oil price rose to $62.39 per barrel, Brent to $64.19
Rising oil prices reflect ongoing geopolitical risks and supply concerns
Escalating Russia-Ukraine Hostilities Heighten Market Anxiety
Tensions between Russia and Ukraine intensified with Moscow launching missile and drone attacks just ahead of new peace talks scheduled in Istanbul. Ukraine’s Security Service reported a drone strike destroying over 40 Russian planes deep inside Russia, signaling a sharp escalation. These developments contribute to the growing risk backdrop affecting global markets.
Highlights:
Russia launched missile and drone attacks ahead of peace talks
Ukrainian drone strike reportedly destroyed 40+ Russian aircraft
Heightened conflict adds to geopolitical uncertainty
Regional Markets Reflect Global Concerns and Trade Disputes
The Hang Seng’s 2.2% drop to 22,778.45 was the steepest regional fall, driven by renewed US-China tariff conflicts, with both sides accusing breaches of the recent Geneva tariff agreement. Tokyo’s Nikkei 225 fell 1.6% to 37,356.97, while South Korea’s Kospi declined 0.4% to 2,686.17. Australia’s S&P/ASX 200 slipped 0.2% to 8,416.00, reflecting the broader regional selloff amid geopolitical and trade uncertainties.
Highlights:
Hang Seng fell 2.2%, Nikkei down 1.6%, Kospi down 0.4%, ASX 200 down 0.2%
US-China tariff tensions drive investor caution across Asia
Regional markets weigh escalating geopolitical risks
Wall Street Wraps Up Best Month Since 2023 Despite Recent Volatility
Friday marked the end of Wall Street’s strongest month since 2023, with the S&P 500 closing just below flat at 5,911.69. The Dow Jones Industrial Average edged 0.1% higher to 42,270.07, while the Nasdaq Composite retreated 0.3% to 19,113.77. Notably, retail giant Gap weighed heavily on the market, falling 20.2% after warning tariffs on imports could add up to $300 million in costs this fiscal year despite beating profit expectations.
Highlights:
S&P 500 ended May at 5,911.69, Dow gained slightly, Nasdaq fell 0.3%
Gap shares dropped 20.2% citing tariff-driven cost pressures
May marked S&P 500’s best month since November 2023
Tech Sector Volatility and Retail Earnings Influence Market Sentiment
Big Tech stocks experienced notable swings with Nvidia falling 2.9% despite beating earnings forecasts, representing the heaviest drag on the S&P 500. On the positive side, Ulta Beauty surged 11.8% after reporting strong sales and raising revenue guidance, while Costco gained 3.1% following better-than-expected quarterly results. These divergent earnings outcomes highlight ongoing volatility in investor sentiment as earnings season winds down.
Highlights:
Nvidia declined 2.9% despite positive earnings results
Ulta Beauty surged 11.8% on strong sales and raised guidance
Costco climbed 3.1% after beating revenue and earnings expectations
Bond Yields Ease and Consumer Sentiment Improves
Treasury yields softened following a report indicating inflation — measured by the Federal Reserve’s preferred gauge — was slightly lower than expected in April. Additionally, consumer sentiment in the US improved in May, surpassing economist forecasts, buoyed partly by the temporary pause on tariffs. These factors provide a mixed backdrop to ongoing economic uncertainty.
Highlights:
Treasury yields declined on softer inflation data for April
US consumer sentiment improved in May, exceeding expectations
Sentiment boosted by tariff pause and easing trade concerns
Currency Markets Show Minor Movements
In currency trading early Monday, the US dollar weakened against the Japanese yen, moving from 143.87 to 143.55 yen. The euro strengthened marginally, rising to $1.1364 from $1.1351, reflecting relatively stable currency dynamics amid ongoing global uncertainties.
Highlights:
US dollar fell against Japanese yen from 143.87 to 143.55
Euro edged higher to $1.1364 from $1.1351
Currency markets remain relatively steady amid geopolitical risks
