Asian Stocks Stage Cautious Recovery, Oil Slips: Markets Wrap
(Bloomberg) — Asian stocks stabilized after their biggest drop since March as tensions in the Middle East eased and a selloff in artificial intelligence shares abated.
The MSCI Asia Pacific Index climbed 0.7%, its first advance following three days of losses spurred by factors including bets for an interest-rate hike by the Federal Reserve. South Korean shares pared some of their earlier gains to climb 1.9% after dip buyers returned to the AI trade.
Despite the gains, a sense of caution prevailed in the market with equity-index futures for the Nasdaq 100 dropping 0.3%. Treasuries slipped, sending the yield on the benchmark 10-year higher by one basis point to 4.57%.
Brent crude fell 0.4% to trade just below $94 a barrel after Iran and Israel pledged to ease strikes that threatened the peace talks in the Middle East. Gold edged 0.1% lower to around $4,325 an ounce while a Bloomberg gauge of the dollar was little changed.
After a brief interruption to the rally that propelled markets to record highs, investors are making a cautious return to equities on expectations the bull market still has room to run, driven by corporate profits. Sentiment has also improved as geopolitical tensions ease, reducing concerns over oil-driven inflation and the prospect of higher interest rates.
“Markets rarely move in a straight line at the pace seen since the March lows,” according to Morgan Stanley’s Mike Wilson, who maintained his constructive outlook, supported by earnings and strong economic data. “A correction was inevitable and ultimately healthy if this bull market is going to extend into year-end.”
Meanwhile, Iran and Israel agreed to ease strikes against each other after a flare-up in violence threatened to derail peace negotiations and led President Donald Trump to appeal for de-escalation.
Attention remains focused on whether energy flows will resume meaningfully via the Strait of Hormuz. A trickle of commercial shipping returned to the waterway over the weekend, even as the risks prompted some vessels to travel with their digital transponders switched off.
Oil prices and their impact on inflation are key factors traders are watching after Friday’s blowout payrolls report reinforced bets on a rate hike. The May consumer price index due Wednesday is expected to jump by 4.2% from a year earlier — the highest rate in more than three years.
But the core CPI is seen cooling slightly on a monthly basis — potentially providing a welcome signal to Fed officials.
Meantime, Citigroup Inc. strategists led by Scott Chronert raised their year-end target for the S&P 500 after a “big step up” in earnings expectations.
“We do not expect investors to lose confidence in the AI outlook,” said Mark Haefele at UBS Global Wealth Management. “Although tech stocks have come under pressure in recent days amid concerns about whether expectations can be met, business fundamentals remain strong.”
Not everyone was as bullish. Investors should exercise caution regarding US stocks as an increasing number of “bear market signposts” point to an approaching top, according to Bank of America Securities.
There are “too many red flags,” strategists led by Savita Subramanian wrote in a note dated June 5. “Take profits,” they said.
Corporate News:
OpenAI, the maker of ChatGPT, filed confidentially for an IPO, joining artificial intelligence rivals in tapping public markets to fund ambitious growth plans. SpaceX’s initial public offering is well oversubscribed, according to people familiar with the matter, as demand builds for a potentially record-setting debut. The Pentagon accused some of China’s biggest companies including Alibaba Group Holding Ltd., Baidu Inc. and BYD Co. of supporting the Chinese military. A federal judge struck down a $100,000 fee President Donald Trump ordered for H-1B visa applications, providing a reprieve for US technology companies. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 10:16 a.m. Tokyo time Japan’s Topix rose 0.3% Australia’s S&P/ASX 200 fell 0.9% Hong Kong’s Hang Seng fell 1.2% The Shanghai Composite fell 1.7% Euro Stoxx 50 futures fell 0.6% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was unchanged at $1.1534 The Japanese yen was little changed at 160.22 per dollar The offshore yuan was little changed at 6.7812 per dollar The Australian dollar was little changed at $0.7046 Cryptocurrencies
Bitcoin fell 1.2% to $62,680.79 Ether fell 1.4% to $1,666.61 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.57% Japan’s 10-year yield advanced 2.5 basis points to 2.740% Australia’s 10-year yield advanced six basis points to 4.97% Commodities
West Texas Intermediate crude fell 0.3% to $91.01 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck.
©2026 Bloomberg L.P.
