Investors drew comfort from signs of patchy progress in settling the Middle East conflict, packed with earnings and key economic data, edging shares higher while oil prices flatlined in Asia on Monday.
Investors decided to reserve judgment and left Brent crude futures up just 0.2% at $108.36 per barrel, having recovered from an initial drop of more than 2%, while U.S. crude eased 0.1% to $101.85, data from Reuters showed.
Dealers noted a bulk carrier had reported being attacked by multiple small craft while transiting past Sirik in Iran on Sunday, though it was not clear how many ships would try to run through the Strait of Hormuz even with Navy protection.
A holiday in Japan made for thin trading conditions, leaving Nikkei futures up only modestly at 59,810 versus a cash close of 59,513.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 3%, led by tech-heavy South Korean stocks, which returned from holiday with a jump of 4.6%. Hong Kong’s Hang Seng index gained 1.7%.
EUROSTOXX 50 futures and DAX futures each added 0.3%. S&P 500 futures gained 0.1% and Nasdaq futures rose 0.3%, as markets braced for more than 100 earnings reports this week.
Companies reporting include Advanced Micro Devices, Super Micro Computer (SMCI.O), Palantir, Walt Disney, and McDonald’s.
Both the S&P 500 and the Nasdaq logged their sixth consecutive week of gains, their longest weekly winning streaks since October of 2024.
The S&P 500 EPS growth rate was running at 25% and accounting for one-off gains at a still brisk 16%, said analysts at Goldman Sachs in a note.
“Despite elevated energy prices and geopolitical uncertainty, corporate guidance and analyst estimate revisions have remained strong so far this quarter,” they said. “However, the reward for EPS beats has been unusually small.”
The Japanese yen suddenly jumped in Asian trading, with the dollar falling as much as 0.9% to 155.7 yen before paring some of the losses. Traders are on alert for another intervention after Tokyo stepped into the market to shore up the currency last week.
President Donald Trump said the U.S. would begin an effort to free up ships stranded in the Strait of Hormuz on Monday morning, though he gave no details of the plan.
A statement from the U.S. Central Command said support would include guided-missile destroyers, over 100 land- and sea-based aircraft, and 15,000 service members. A report from Axios later claimed the Navy would not necessarily escort ships through the strait.
Iran earlier said the U.S. had responded to its 14-point proposal via Pakistan, and it was reviewing the response, though Trump said it was unlikely to be acceptable.
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Central Banks Warn Of Inflation Risks
Concerns remained about the scale of artificial intelligence capex investment, which was now at $751 billion for 2026, $80 billion above estimates at the start of the earnings season and 83% above 2025 spending.
The threat of oil-driven inflation had also lifted bond yields in a challenge to equity valuations, while several major central banks had turned hawkish on policy.
Markets implied just 2 basis points of easing from the Federal Reserve by the end of the year compared with 11 basis points a week ago. Expectations for the European Central Bank had climbed to 76 basis points of hikes, with the Bank of England at 63 basis points.
Australia’s central bank meets on Tuesday and is considered likely to hike its cash rate for a third time running as it battles stubborn inflationary pressures.
The outlook for Fed policy could be budged by a raft of data this week, which includes the payrolls report for April on Friday. Median forecasts are for a rise of 60,000 in jobs following March’s outsized 178,000 gain, though problems with seasonal adjustment make for much uncertainty.
In currency markets, the dollar was a shade softer as investors waited for further developments in the Middle East and, crucially, whether the Strait of Hormuz could be reopened.
The dollar was last 0.4% lower at 156.54 yen, having dived to as low as 155.7 yen earlier, as traders smarted from last week’s Japanese intervention, which analysts thought could have amounted to around $35 billion.
The euro was flat at $1.1726, while the pound held at $1.3584 ahead of local elections in Britain, which could see heavy losses for the ruling Labour Party.
In commodity markets, gold was flat at $4,610 an ounce, well within recent trading ranges.
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