Global Markets Show Positive Trends Amidst Oil Price Drop
BANGKOK — On Monday, global shares mostly climbed while oil prices took a significant hit, dropping nearly 7%. This decrease came as discussions between the U.S. and Iran continued regarding a possible pause in hostilities.
One notable highlight from the trading day was Chinese memory chipmaker CXMT, whose shares skyrocketed by 466% on their debut in Shanghai’s tech market, making it the most valuable listed company in China with a market worth around 3.3 trillion yuan (almost $490 billion).
The Pentagon has not commented on the recent halt in attacks against Iranian locations following two weeks of intense conflict that started when Iran targeted ships in the Strait of Hormuz. The markets, however, responded positively to this development. U.S. futures rose early Monday, and the price of Brent crude oil fell by 6.8%, settling at $85.49 per barrel. Similarly, U.S. benchmark crude dropped by 7% to $83.06.
Stephen Innes from SPI Asset Management highlighted that this sudden drop in oil prices has eased some of the tensions that have been affecting various markets for most of July.
In early trading in Europe, Germany’s DAX index climbed 1.6% to 25,497.42, while France’s CAC 40 rose by 0.8% to 8,436.94. The UK’s FTSE 100 saw a smaller gain, rising 0.5% to 10,784.00. Futures for both the S&P 500 and Dow Jones Industrial Average were up by 1%.
Asian markets also saw positive results, with Japan’s Nikkei 225 increasing by 0.5% to 64,931.19 and South Korea’s Kospi advancing by 1% to 6,755.75. In Hong Kong, the Hang Seng index gained 1% to 25,207.18, and the Shanghai Composite rose 1.2% to 3,858.25. Australian markets saw the S&P/ASX 200 surge by 1.4% to 8,894.00.
On the other hand, Taiwan’s Taiex slipped 0.1%, while India’s Sensex saw a modest rise of 1.1%.
Despite these gains, U.S. markets faced challenges last week. The S&P 500 barely moved, showing an increase of less than 0.1% and marking its second consecutive losing week, a first since March. The Dow saw a 0.5% rise, but the Nasdaq composite fell by 0.6% as major companies like Micron Technology and Broadcom faced declines.
Recent hikes in energy prices and new tariffs announced last week have raised concerns about inflation, which continues to impact consumers and influence the Federal Reserve’s interest rate decisions. This week, the Fed is scheduled to meet, yet expectations for an interest rate cut seem dim due to rising inflation.
With rising energy prices eating into household budgets, the cost of gasoline is a pressing concern. Currently, the average price for a gallon of gasoline is $4.11, lower than earlier this spring but nearly a dollar more than last year.
Innes noted that oil prices are essential to the economy, stating that when crude prices spike, it affects consumers directly at the pump and can ripple through various sectors, eventually leading to greater inflation worries.
Meanwhile, corporate earnings are being closely monitored as spending on artificial intelligence continues. Tech giants like Alphabet and Nvidia are investing heavily in AI, prompting investors to question whether these investments will yield sufficient profits to justify their high stock prices.
In currency exchanges on Monday, the U.S. dollar fell to 163.56 Japanese yen from 163.64 yen, while the euro rose slightly to $1.1399 from $1.1398.
