Today’s Outlook :
• US MARKET : Wall Street closed mostly higher on Monday, rebounding from last week’s sharp sell-off. Sentiment was supported by gains in semiconductor stocks and easing tensions between Iran and Israel. The S&P 500 rose 0.3%, the Nasdaq gained 0.9%, while the Dow Jones slipped 0.2%.
The market had previously come under pressure following strongerthan-expected U.S. employment data, which increased expectations of further interest rate hikes by the Federal Reserve. This pushed U.S. Treasury yields higher and weighed on technology stocks.
This week’s market focus is on the release of U.S. May inflation data, namely the Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday, both of which will be key indicators for the Fed’s future interest rate decisions.
Within the equity market, semiconductor stocks led gains, with the Philadelphia Semiconductor Index rising 5.6%. Marvell Technology surged 9.6% after being selected for inclusion in the S&P 500 Index and supported by strong growth prospects in its custom-chip business.
• EUROPEAN MARKET : European markets closed mixed on Monday as escalating tensions in the Middle East pushed oil prices higher. The situation fueled concerns that rising energy costs could worsen inflation and complicate the European Central Bank (ECB)’s policy outlook ahead of its upcoming meeting. The Stoxx 600 fell 0.2%, Germany’s DAX declined 0.5%, and France’s CAC 40 lost 0.2%, while the UK’s FTSE 100 edged up 0.1%.
Investors are concerned that higher energy prices could reignite inflationary pressures and force the ECB to raise interest rates again. Eurozone government bond yields climbed to their highest levels in several weeks, with markets now pricing in as many as three ECB rate hikes before year-end. Rising bond yields also weighed on European equities.
• ASIAN MARKET : Asian semiconductor stocks declined on Monday as the artificial intelligence (AI)-driven rally that had previously boosted chipmakers began to lose momentum.
In South Korea, SK Hynix fell 5.4% and Samsung Electronics dropped 2%, while LG Electronics tumbled 6.9%. The sell-off briefly dragged the KOSPI Index down as much as 8.8% before it recovered part of its losses. SK Hynix’s decline was partly cushioned after the company announced a new partnership with NVIDIA.
Meanwhile, economic data showed that Japan’s economy grew 1.8% in the first quarter, below the previous estimate of 2.1%, mainly due to weaker business spending.
• COMMODITIES : Oil prices traded relatively flat during Tuesday’s Asian session as investors assessed a fragile ceasefire between Israel and Iran after both countries agreed to halt attacks following an appeal by Donald Trump.
August Brent crude futures edged up 0.1% to USD 94.33 per barrel, while WTI crude traded flat at USD 91.29 per barrel. Brent prices had previously surged above USD 98 per barrel on Monday amid escalating military tensions between Israel and Iran but later retreated as signs of de-escalation emerged.
• INDONESIA : The JCI extended its decline on Monday, closing at 5,342.14, down 4.5%, weighed down by weakness in conglomerate and large-cap stocks, including TLKM, which approached its auto-rejection lower limit.
Market sentiment remains under pressure, partly due to concerns over the inversion of Indonesia’s government bond yield curve. Unless there is greater clarity and certainty regarding macroeconomic conditions and government economic policies, the market is expected to remain in negative territory.
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