Asia-Pacific Markets Slip as Middle East Tensions Weigh on Sentiment

On Tuesday (2 June, 9:18 AM, GMT+7, Bangkok time), most major indices in the Asia Pacific exhibited a downward trend as traders reacted to renewed doubts surrounding negotiations between the United States and Iran. At the same time, U.S. major stock indices set new records overnight, buoyed by strength in technology shares. U.S. President Donald Trump, addressing concerns about faltering discussions with Tehran, said he was indifferent to whether the talks continue. Speaking to CNBC, Trump indicated that the protracted nature of the negotiations had become uninteresting for him. The remarks followed news earlier that Iranian representatives might walk away from talks, potentially threatening to fully close the Strait of Hormuz in response to Israel’s military activities against Hezbollah in Lebanon. While the ongoing rally in artificial intelligence and tech sectors has lifted U.S. equities, recent gains have been tempered by geopolitical developments. The unstable regional security situation, especially involving the Strait of Hormuz, has kept crude prices and inflation expectations in focus. Attention now shifts to incoming U.S. economic indicators, including Friday’s employment report for May, which may influence expectations for Federal Reserve policy under Chairman Kevin Warsh. Japan’s NIKKEI declined by 1.88% to 65,673.64. South Korea’s KOSPI slumped by 2.53% to 8,566.10, and Australia’s ASX 200 contracted by 0.87% to 8,653.20. As for stocks in China, Shanghai’s SSEC decreased by 0.34% to 4,043.76. Shenzhen’s SZI fell by 0.48% to 15,267.51, while Hong Kong’s HSI rose by 0.55% to 25,538.11. The U.S. stock markets edged up on Monday as the Dow Jones Industrial Average (DJIA) climbed by 0.09% to 51,078.88. NASDAQ grew by 0.42% to 27,086.80, and S&P 500 added 0.26% to 7,599.96. VIX surged by 4.77% to 16.05. As for commodities, oil prices settled higher on Monday after reports from Iran’s Tasnim indicated an end to indirect discussions between Tehran and Washington, with Iranian military and allied groups preparing measures to fully close the Strait of Hormuz. Brent crude reached $94.98 per barrel, an increase of $3.86, or 4.2%. U.S. crude futures climbed $4.80, or 5.5%, to finish at $92.16 per barrel. This morning, Brent futures dropped 65 cents, or 0.68%, to $94.33 per barrel, and the WTI futures lost 62 cents, or 0.67%, to $91.54 per barrel. Meanwhile, gold futures slid by 0.06% to $4,503.60 per Troy ounce.