Today’s Outlook :
• US MARKET : The S&P 500 fell 0.2% to 7,401.39 points after briefly declining as much as 1%, while the NASDAQ Composite dropped 0.7% to 26,088.20 points after previously plunging 2%. Meanwhile, the Dow Jones managed to edge up 0.1% to 49,760.56 points, supported by gains in defensive stocks such as UnitedHealth, Walmart, and Amgen. Despite the decline, the three major U.S. indexes remain near record highs, supported by a solid earnings season, the AI stock rally, and hopes for easing tensions in the Iran conflict.
Wall Street retreated from record highs on Tuesday after April U.S. inflation data came in above expectations. CPI rose 0.6% MoM and 3.8% YoY, exceeding the 3.7% consensus and marking the highest level since May 2023. Core CPI also rose above forecasts to 0.4% MoM and 2.8% YoY, reinforcing market concerns over the inflationary impact of the Iran war, particularly through higher oil and gasoline prices.
The data sparked speculation that the Fed could still potentially raise interest rates this year, although most markets continue to expect rates to remain unchanged. The inflation release also comes ahead of the end of Fed Chair Jerome Powell’s term, with Kevin Warsh reportedly a potential successor after being nominated by President Donald Trump.
Markets also remain overshadowed by the lack of progress toward a U.S.-Iran peace agreement. Trump described the ceasefire as being in a “very fragile” condition and rejected Iran’s peace proposal. The U.S. is also reportedly maintaining its naval blockade against Iran and considering the resumption of military operations.
Trump is scheduled to make a three-day visit to China, with markets hoping his meeting with President Xi Jinping could help ease the deadlock surrounding Iran. Besides geopolitical issues, the two leaders are also expected to discuss trade tariffs, Taiwan, and artificial intelligence (AI).
• EUROPEAN MARKET :European stock markets closed lower on Tuesday, weighed down by limited indications that the U.S. and Iran are nearing a permanent peace agreement. The pan-European Stoxx 600 fell 1%, Germany’s DAX declined 1.5%, the UK’s FTSE 100 slipped 0.04%, while France’s CAC 40 corrected nearly 1%.
• ASIAN MARKET :Most Asian stock markets traded mixed with a weaker bias on Tuesday as the rally in chip-related technology stocks began losing momentum. Markets also remained overshadowed by limited signs of de-escalation in the U.S.- Iran conflict
South Korea’s KOSPI was the worst-performing index in the region, at one point plunging as much as 4% in volatile trading. The index had earlier hit a record high before reversing sharply lower due to profit-taking, particularly in chip stocks that had previously rallied strongly on optimism surrounding AI demand.
Elsewhere, Japan’s Nikkei 225 and TOPIX indexes each rose 0.5%, although markets have started considering the possibility of a Bank of Japan rate hike following more hawkish signals from the April meeting
Meanwhile, China’s CSI 300 and Shanghai Composite traded flat, while Hong Kong’s Hang Seng posted slight gains. Market focus this week is also on the meeting between President Donald Trump and President Xi Jinping in China, where the two leaders are expected to discuss various issues amid still-strained U.S.-China relations.
• COMMODITIES : Oil prices edged lower in Wednesday’s Asian trading session after rallying for three consecutive sessions, as market participants weighed ongoing distribution disruptions through the Strait of Hormuz and monitored U.S. oil inventory data.
July Brent Oil Futures fell 0.4% to USD 107.36 per barrel, while West Texas Intermediate (WTI) slipped 0.3% to USD 101.91 per barrel. Markets remain overshadowed by uncertainty after President Donald Trump said prospects for a ceasefire with Iran are on “life support” and rejected Tehran’s latest response to the U.S.-backed peace proposal, increasing concerns that the conflict could last longer
• INDONESIA : The JCI Composite closed in the red zone at 6,858.9 as selling pressure on conglomerate stocks continued amid market anticipation over the potential deletion of several stocks from the MSCI Indonesia index.
In addition to investor concerns over domestic risks related to the exchange rate and policies perceived as less supportive toward investors—especially given the IHSG’s underperformance compared to regional peers—sentiment surrounding MSCI deletions involving several Indonesian big caps such as AMMN, TPIA, BREN, DSSA, and CUAN, along with AMRT’s downgrade to small cap status, is expected to create significant selling pressure on the IHSG. If market participants panic, selling pressure from these names could trigger a broader market decline, potentially testing the IHSG at 6,500. Investors may use this opportunity to accumulate fundamentally strong and sufficiently discounted stocks as a portfolio hedging strategy.
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