Crossfire & Crosscurrents

Global markets were mixed as investors weighed President Trump’s threat of a ‘massive attack’ on Iran, fresh US tariffs, and resilient economic data. European equities advanced on strong earnings and improving business activity, while a technology-led sell-off in South Korea drove weakness across Asia-Pacific.

US benchmarks split on geopolitical conflict fears

US stocks were mixed as investors weighed the prospect of a major US escalation in Iran against fresh trade tariffs and continued weakness in semiconductor stocks. The DOW gained +0.5%, while the S&P 500 was flat and the NASDAQ fell -0.6%. Intel plunged -7.9% despite stronger-than-expected quarterly results, while Micron (-7.0%), AMD (-3.3%), and Applied Materials (-4.7%) dragged the VanEck Semiconductor ETF down -3.3% as chipmakers remained under pressure. In contrast, software stocks outperformed, with ServiceNow rising +7.4% on growing AI demand and upbeat full-year guidance, helping lift the iShares Expanded Tech-Software Sector ETF +1.0%. Apple rose +3.5%, supporting the DOW, while SpaceX fell -2.7% ahead of Starship’s 13th test flight. S&P Global data showed US business activity expanded at its fastest pace in eight months. Meanwhile, President Trump said he was considering a ‘massive attack’ on Iran as US forces completed a thirteenth consecutive night of strikes, while imposing fresh tariffs of between 10% and 12.5% on imports from most major trading partners, despite reports of renewed China–backed peace talks. The US two-year Treasury yield slipped -2bp to 4.337%, while the 10-year yield also fell -2bp to 4.681%.

Economic data and earnings lift Europe

European markets rose as stronger-than-expected eurozone PMI data and upbeat earnings offset fresh US tariffs. The STOXX 600 gained +0.8%, the FTSE 100 rose +0.9%, Germany’s DAX climbed +1.4%, and France’s CAC 40 added +0.9%. SAP surged +9.3% after stronger earnings and robust cloud demand, while RELX (+4.8%) and Rolls-Royce (+4.2%) also advanced. Volkswagen fell -2.0% after weaker earnings and paring back its revenue outlook.

Asia sinks on oil and tariffs

Asia-Pacific markets fell as surging oil prices, renewed US tariffs, and escalating Middle East tensions triggered a broad risk-off session. South Korea’s KOSPI plunged -5.7% as Samsung Electronics (-7.6%) and SK Hynix (-8.3%) slumped alongside Kia (-12.9%) after weaker-than-expected earnings. Japan’s Nikkei 225 fell -2.7% as SoftBank (-7.1%), Advantest (-6.0%), and Tokyo Electron (-5.0%) led technology losses. China’s Shanghai Composite dropped -1.6% and Hong Kong’s Hang Seng fell -1.0% following fresh US tariffs, while Australia’s ASX 200 declined -0.8% as mining and technology stocks weakened, partly offset by gains in banks and insurers. New Zealand’s NZX 50 slipped -0.2%, weighed down by Fletcher Building (-2.9%) and SkyCity (-2.3%).

Oil falls on peace hopes

WTI crude fell -3.1% to US$89.31/bbl after reports that Pakistan was seeking to revive US–Iran peace talks, with China’s backing, eased concerns over potential Middle East supply disruptions. Brent crude fell -3.1% to US$96.78/bbl. Gold added +0.1% to US$4,052.56/oz, and iron ore remained flat at US$98.42/MT.