Asian equities moved unevenly on Monday as energy prices retreated from earlier intraday highs and market participants prepared for a week that includes U.S. consumer and producer inflation readings and a heavy slate of third-quarter corporate results.
Trading activity was subdued. Japan’s cash markets were closed for Sports Day, and U.S. bond trading was halted for Columbus Day even though U.S. stock exchanges remained open. Thin turnover in several markets accompanied the holiday-related pauses.
Wall Street arrived into the Asian session on the back of another positive week, with the S&P 500, Dow Jones Industrial Average and the Nasdaq Composite all posting gains on Friday. In Asian trading, Nasdaq 100 futures and S&P 500 futures traded higher as well. Treasury yields, however, remained elevated after reaching their highest levels in 24 years last week, with the 10-year yield approaching 5.4%. A measure of U.S. investment-grade credit-default swaps also climbed to its highest level since the Iran war began.
Investors are watching this week’s U.S. consumer and producer inflation reports and retail sales data closely for signals about the Federal Reserve’s next moves. Markets were assigning an 18% probability of a Fed rate hike this month and an 85% chance of an increase in December.
Chip supply chain spotlight
Semiconductor-related stocks were a mixed bag as trading resumed across the region after various holidays. South Korea’s KOSPI fell sharply as the market reopened, with notable declines in memory and electronics suppliers. SK Hynix and Samsung Electronics both declined, and LG Innotek fell steeply.
Taiwan's market also experienced pressure overall, though moves were disparate among suppliers. Largan posted a strong gain, Foxconn recorded a rise, while Taiwan Semiconductor Manufacturing slipped slightly. Attention is quickly turning to Thursday, when Taiwan Semiconductor Manufacturing is due to report results. The world’s largest advanced-chip foundry is expected to report a sixth consecutive quarter of record earnings as demand for AI chips and advanced CoWoS packaging remains strong.
Regional markets and notable movers
In mainland China and Hong Kong, moves were modest. Hong Kong’s Hang Seng added a small gain while the CSI 300 in mainland China inched down. Several individual mainland and Hong Kong-listed technology and semiconductor-related names outperformed, with MiniMax, NAURA Technology and Cambricon among those posting modest gains. NetEase, Alibaba and Tencent all gained ground.
Australia’s S&P/ASX 200 rose, yet not all Australian-listed stocks participated. MAAS Group shares continued to tumble, extending a prior selloff after data-center operator Firmus cancelled a planned $5 billion initial public offering.
Elsewhere in Asia, New Zealand’s benchmark advanced, Singapore’s Straits Times climbed, Indonesia’s Jakarta Composite fell and India’s Nifty 50 futures were higher.
Oil and geopolitical drivers
Oil prices eased after an earlier spike. Brent crude fell to about $103.01 a barrel from a higher intraday level, and U.S. crude futures also retreated to roughly $90.11, leaving prices below a recent peak of $109.97. The latest swings in energy markets followed weekend attacks by Yemen’s Iran-backed Houthis on shipping and an assault on Riyadh’s main airport, which had elevated concerns about a broader regional escalation and potential disruptions to energy supply.
Compounding the uncertainty, a public statement by U.S. President Donald Trump that Russia and Ukraine had agreed to an immediate energy ceasefire added confusion to the market. Neither Russia nor Ukraine confirmed a finalized agreement, and Ukrainian President Volodymyr Zelenskyy said no deal had been reached. The proposal for Russia to boost diesel exports drew questions from members of both political parties in the U.S. Senate, who raised potential legal concerns.
Policy and market implications
With Treasury yields near multi-decade highs and credit-default swaps elevated, markets are particularly attentive to incoming U.S. inflation readings and retail data for guidance on Fed policy. The mix of equity performance across sectors - with materials in energy, technology and certain industrials reacting to both macro and company-specific developments - underscores the uneven nature of the market backdrop ahead of the earnings flow.
Investors and traders will remain sensitive to further developments in the Middle East and any concrete confirmation of talks or agreements involving Russia and Ukraine that could affect energy flows and commodity prices.
What to watch this week
- U.S. consumer price and producer price data as well as retail sales figures that could influence the Federal Reserve’s path.
- Taiwan Semiconductor Manufacturing’s earnings report later in the week and results from other major corporates in the third-quarter season.
- Any additional geopolitical developments in the Middle East or official confirmation regarding an energy ceasefire between Russia and Ukraine that could affect oil markets.
Markets enter the week with a combination of thin holiday-driven liquidity and elevated macro and geopolitical risks, while earnings news could provide fresh direction for equity sectors and individual names.