Oil Holds at $69, Market “Puts on Helmets” Ahead of US-Iran
Crude oil prices held in the higher zone as market participants began pricing in increased geopolitical risk after Iran conducted naval exercises around strategic shipping lanes ahead of the resumption of talks with the United States. Brent traded just below $69/barrel after gaining 1.3% on Monday, while WTI hovered around $64/barrel. Meanwhile, precious metals weakened—gold fell 0.9% to around $4,950/ounce and silver fell 2.8%, while Asian stocks traded within a narrow range during the holiday trading session.
The spotlight returned to the Middle East. Iranian Foreign Minister Abbas Araghchi reportedly met the head of the UN nuclear watchdog in Geneva on Monday, ahead of the second round of nuclear negotiations with the US. US President Donald Trump said he would be indirectly involved in the talks and assessed that Iran wanted to reach a deal. However, tensions remained fragile, as Trump also threatened to strike if Iran did not agree to curbs on its nuclear program in exchange for sanctions relief, while the US is said to be increasing military readiness in the region.
On the monetary policy front, the path of US interest rates remains the "anchor" for market direction. Following lower-than-expected US inflation data, market participants are increasingly confident that the chances of a rate cut are strengthening, with strong expectations pointing to June, and a cut scenario already "locked in" around July. Cash trading in US bonds has resumed after Friday's rally; the 10-year yield is around 4.04%, while short-term yields remain low as the market increases the probability of more than two cuts this year. This week's agenda includes speeches by Fed officials (including discussions on the labor market and AI), ADP data on Tuesday, and the FOMC minutes on Wednesday.
Beyond interest rates, the equity market is also clouded by the "AI scare trade," a concern that AI adoption could erode earnings in some sectors through cannibalization, particularly software, business services, and media. Several strategies have emerged to capitalize on this divergence, including approaches that take positions in companies that benefit from AI and avoid those that are vulnerable to displaced. Nevertheless, optimism in stocks—particularly in the US—will persist as long as earnings resilience does not collapse. Some believe the earnings season is still showing solid growth, so market direction will be largely determined by a combination of earnings resilience, geopolitical developments, and the Fed's signals in the coming days. (asd)
Source: Newsmaker.id
