Today’s Outlook :
• US MARKET : Wall Street closed lower on Friday amid rising bond yields and oil prices. The Dow Jones fell 1.1% to 49,526.11 points, the S&P 500 declined 1.3% to 7,407.52 points, and the NASDAQ Composite corrected 1.5% to 26,225.15 points.
On a weekly basis, index movements were relatively limited. The S&P 500 still posted a slight 0.1% gain and recorded its seventh consecutive weekly increase, while the Nasdaq and Dow slipped 0.1% and 0.2%, respectively. Despite the correction, the S&P 500 and Nasdaq remained near record-high levels
The rise in Treasury yields came after U.S. inflation data exceeded expectations, reinforcing the view that the Federal Reserve will keep interest rates higher for longer. Market focus this week is on NVIDIA’s earnings report on Wednesday to assess the sustainability of the AI-driven rally that has supported markets this year.
On the geopolitical front, the U.S.-Iran conflict remains a major concern. Donald Trump once again warned Iran through Truth Social and is reportedly set to meet U.S. national security advisers to discuss military options against Tehran. The situation has increased market concerns over a broader escalation in the Middle East conflict, particularly as the Strait of Hormuz remains closed.
Markets are also monitoring the outcome of last week’s meeting between Trump and Xi Jinping in Beijing. Both leaders sought to stabilize U.S.-China relations amid ongoing trade tensions, although no major agreement was reached.
• EUROPEAN MARKET : European stock markets closed sharply lower on Friday, pressured by political instability in the UK and continued uncertainty surrounding the Iran conflict.
The pan-European Stoxx 600 index fell 1.5%, Germany’s DAX dropped 2.1%, France’s CAC 40 slid 1.6%, while the UK’s FTSE 100 corrected 1.8%.
UK Prime Minister Keir Starmer is facing internal political pressure after an opportunity emerged for Greater Manchester Mayor Andy Burnham to enter the UK parliament following the resignation of a Labour Party MP. Burnham, known as a left-wing figure within the Labour Party, is viewed as a potential rival to Starmer, although his chances in a by-election are expected to face strong challenges from Reform UK.
• ASIAN MARKET : Most Asian stock markets weakened on Friday, pressured by chip-related stocks amid doubts over the possibility of the U.S. allowing more chip sales to China. Chinese markets also corrected from multi-year highs after the follow-up meeting between President Xi Jinping and President Donald Trump ended without a clear agreement
South Korea’s KOSPI was the worst-performing index in Asia, plunging 6.1% due to heavy pressure on chip stocks. Samsung Electronics and SK Hynix each dropped around 7% to 9%, becoming the biggest drags on the index. Negative sentiment emerged after U.S. Trade Representative Jamieson Greer stated that chip export controls were not discussed in detail during the latest U.S.-China negotiations.
In China, the CSI 300 and Shanghai Composite indexes each fell 1%, moving away from the 4.5-year and 11-year highs reached earlier this week. The Trump-Xi meeting in Beijing concluded on Friday after Trump’s three-day visit to China. Chinese media reported that Xi highlighted improving U.S.-China relations, although details regarding trade agreements remained unclear. Trump claimed that China had agreed to purchase U.S. oil and increase Boeing aircraft purchases, while China’s Foreign Ministry stated that both countries had reached consensus on several issues.
Japanese markets also weakened after April producer price index (PPI) data came in above expectations. The Nikkei 225 fell 1.8% and TOPIX declined 0.4%, driven by rising oil and chemical prices due to the Iran conflict. The data reinforced expectations that Japanese inflation could broaden further and increase the likelihood of an interest rate hike by the Bank of Japan.
• COMMODITIES : Oil prices surged sharply in early Asian trading on Monday as tensions between the U.S. and Iran remained elevated, especially after a drone strike targeted a nuclear power plant in the United Arab Emirates.
U.S. President Donald Trump warned that “the clock is ticking” for Iran to accept a peace deal, amid reports that the U.S. and Israel are actively discussing further military operations against Tehran
Brent oil futures for July rose 1.3% to USD110.71 per barrel at 19:42 ET (23:42 GMT)
• INDONESIA : The JCI closed in the red zone, falling 1.98% to 6,723.3, pressured by sell-offs in conglomerate stocks, particularly Barito Renewables Energy (BREN) and Dian Swastatika Sentosa (DSSA), alongside foreign outflows as the market anticipates several deletions 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, market participants are also closely watching the Rupiah as it approaches its all-time low against the U.S. dollar.
If market participants panic further, selling pressure from several MSCI constituents could trigger a deeper market decline, potentially testing the IHSG at the 6,500 level. Investors may use this opportunity to accumulate fundamentally solid and discounted stocks as a portfolio hedging strategy.
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