Asian stock markets rose on Monday, building on Wall Street’s rally after a weaker-than-expected U.S. jobs report reduced fears of immediate interest rate increases. Oil prices climbed as uncertainty persisted over shipping routes in the Gulf, with Iran indicating progress on new lanes but linking their reopening to U.S. policy changes.
Brent crude increased 0.9% to $84.32 a barrel, while U.S. crude gained 0.7% to $78.74. The Strait of Hormuz, a key route for global oil shipments, stayed partially blocked, keeping supply concerns in focus.
Higher fuel costs could complicate efforts to control inflation. Analysts anticipate Wednesday’s July consumer price index will show a 0.1% rise in overall inflation and a 0.2% increase in core prices, which exclude food and energy.
JPMorgan’s chief U.S. economist, Michael Feroli, said a core CPI reading near 0.22% would likely avoid a September rate hike, though repeated figures closer to 0.3% might change that. Market expectations for a September move have fallen to 44%, down from 67% a week earlier.
He also pointed out that core goods prices, which declined for two months, could rise again, adding another factor for the Federal Reserve to consider.
The Nikkei 225 in Japan gained 0.6%, while South Korea’s Kospi added 0.5%. MSCI’s Asia-Pacific index, excluding Japan, rose 0.3%. The advances followed a record close for U.S. stocks on Friday, driven by lower Treasury yields and strong corporate results.
S&P 500 futures dipped 0.1% in early trading, while Nasdaq futures remained stable after a 5% weekly gain. Nearly 90% of S&P 500 companies have reported earnings, with a 30% year-over-year increase in earnings per share—excluding one-time gains at Alphabet and Amazon. The 76% beat rate matched the highest level since 2021.
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Bank of America analysts noted artificial intelligence as a key driver, with median EPS growth of 28% for AI-related stocks compared to 12% for others. Forecasts, however, expect AI growth to slow to 16% next quarter.
This week’s earnings reports include semiconductor company Applied Materials, networking firm Cisco, and cloud infrastructure provider CoreWeave.
In the bond market, 10-year Treasury yields edged up to 4.673%, with investors preparing for $125 billion in new issuance. The dollar weakened, pushing the euro near a seven-week high at $1.1557. Against the yen, the dollar held at 157.85, as traders watched for possible intervention by Japanese officials.
Gold, which doesn’t earn interest, benefited from lower yields, staying at $4,342 an ounce after a 7% weekly gain.
European markets sent mixed signals, with EUROSTOXX 50 and DAX futures both down 0.1%, while FTSE futures fell 0.4%. The hesitation suggested investors were waiting for clearer signals before making larger moves.
A single weak jobs report won’t erase inflation risks.
