Investors remain cautious despite signs of de-escalation and expectations of further negotiations
Asian stock markets delivered a mixed performance on Monday, while oil prices edged higher after reports indicated that the United States and Iran had agreed to halt fresh military attacks following a weekend of escalating tensions.
Investor sentiment remained fragile as markets continued to weigh geopolitical uncertainty alongside concerns over elevated technology stock valuations driven by the artificial intelligence boom.
Reports suggested Washington and Tehran had agreed to suspend further hostilities and continue negotiations, with another round of talks expected in Qatar. The discussions aim to strengthen the existing memorandum of understanding and advance efforts to restore stability, including the reopening of the Strait of Hormuz.
Oil climbs as markets monitor diplomacy
Meanwhile, crude prices rose after both sides reportedly agreed to pause military operations despite recent exchanges of strikes that disrupted shipping through the strategic waterway.
US officials said technical discussions would continue under the existing framework while maritime traffic would be allowed to move freely through the Strait of Hormuz. Brent and West Texas Intermediate crude futures both advanced, with WTI gaining more than one percent during early trading.
Market participants, however, remained cautious as Iranian officials reiterated their position regarding navigation through the vital shipping route, keeping uncertainty elevated across global energy markets.
Technology shares remain under pressure
Regional equity markets traded unevenly, with gains recorded in Hong Kong, Sydney, Wellington, Taipei and Manila. In contrast, Tokyo, Seoul, Shanghai, Singapore and Jakarta closed lower as investors reduced exposure to technology stocks.
South Korean chipmakers faced renewed selling pressure amid growing concerns that artificial intelligence-related valuations may have become overstretched. Analysts also cited uncertainty over when massive investments in AI infrastructure would begin generating sustainable returns.
Investors are now awaiting upcoming US employment data, which could influence the Federal Reserve’s future interest rate decisions. Strong labor market figures may reinforce expectations of tighter monetary policy, while weaker data could support technology and other interest rate-sensitive sectors.
