Today’s Outlook :
• US MARKET : U.S. stocks closed lower on Monday as oil prices surged, after tensions between Washington and Tehran flared up again over the Strait of Hormuz. The benchmark S&P 500 index fell 0.4% to 7,201.75, the NASDAQ Composite declined 0.2% to 25,067.80, and the Dow Jones dropped 1.1% to 48,941.90.
President Donald Trump announced the “Project Freedom” initiative to reopen shipping lanes in the Strait of Hormuz, which carries around 20% of the world’s oil but has been effectively disrupted since the conflict began. Iranian media reported that missiles were fired at U.S. warships and struck one vessel, but U.S. Central Command denied the claim and said two U.S. merchant ships had successfully transited the strait.
Beyond the Middle East conflict, U.S. markets just came off a busy week, including dense economic data releases, a Federal Reserve interest rate decision, and earnings reports from major companies including members of the “Magnificent 7.” U.S. real GDP growth in Q1 2026 increased from the previous quarter, though slightly below expectations. Inflation came in as expected, while initial jobless claims fell to their lowest level since 1969. The Fed held rates steady, but there were four dissenting votes (the highest since 1992). Fed Chair Jerome Powell also stated he would remain as a governor after his term as chair ends, with Trump nominee Kevin Warsh likely to succeed him. Big Tech earnings were mixed, with Alphabet, Microsoft, and Meta increasing capital expenditure for AI development.
• EUROPEAN MARKET : European shares fell on Monday as Middle East tensions showed no signs of easing and crude oil prices surged, while investors faced the prospect of consecutive rate hikes by the European Central Bank this year. The pan-European STOXX 600 index closed down 1% at 605.51 points—its biggest oneday drop in about a month.
Most sectors declined, amid an explosion hitting a South Korean ship in the Strait of Hormuz and Iranian drone attacks causing a fire at a UAE oil port. These incidents highlighted Tehran’s strong grip on oilsupply in the Middle East.
• ASIAN MARKET : Asian stocks rose on Monday, led by South Korea hitting record highs, while Hong Kong also gained on strength in AI-driven tech stocks. Regional trading volumes were subdued due to market holidays in Japan and mainland China, but most markets remained upbeat, tracking last week’s gains on Wall Street.
South Korea’s KOSPI was the top performer, surging 3.5% to a record 6,828.33. Gains were driven by memory chip makers such as Samsung Electronics and SK Hynix, which rose after posting strong first-quarter results. SK Hynix jumped 6.8% to a record high, while Samsung gained 2.8%. Both benefited from ongoing memory supply shortages expected to support prices and revenues, alongside strong demand from AI players like Nvidia. Meanwhile, Hong Kong’s Hang Seng index rose 1.7%, supported by a rebound in local tech stocks.
• COMMODITIES: Oil prices jumped around 6% on Monday after Iran escalated attacks on the UAE and ships in the Gulf over the past 24 hours—marking the most serious escalation since the U.S.–Iran ceasefire in early April. Brent crude rose USD 6.27 (+5.8%) to USD 114.44 per barrel, while WTI increased USD 4.48 (+4.4%) to USD 106.42.
Iran reportedly attacked several ships in the Strait of Hormuz and set a UAE oil port on fire, amid President Donald Trump’s efforts to deploy the U.S. Navy to reopen shipping lanes. UAE authorities said air defenses were responding to missile and drone threats, while firefighters battled a blaze in a major oil zone following a drone strike believed to have originated from Iran. The U.S. military said it destroyed six Iranian small boats and intercepted cruise missiles and drones launched by Tehran to disrupt effortsto reopen the Strait of Hormuz.
• INDONESIA : The Jakarta Composite Index (IHSG) attempted to hold support at 6,900–6,950, edging up +0.22% to close at 6,971.95. Throughout April, selling pressure from big banks weighed on the index amid expectations of Indonesia’s macroeconomic contraction. Additionally, selling from BREN and DSSA continued to drag the index following their exclusion from LQ45, IDX30, and IDX80. However, a positive note is that IDX’s adjustments align with MSCI standards.
Caution remains warranted regarding selling pressure in big banks. Although valuations appear attractive, downside risks persist alongside macroeconomic contraction. Commodities remain appealing, particularly nickel, which is approaching the psychological level of USD 20,000. Any pullback in commodity stocks, especially in base metals, could present buy-on-weakness opportunities given solid performance and rising ASP in line with commodity prices.
Download full report HERE.
