Oil Rises to Six-Month High, Stocks Weaken
Oil prices rose to a six-month high, while stock markets edged lower, amid rising geopolitical tensions between Iran and the US. The risk-on sentiment that had emerged was slowly being tempered as market participants adopted a cautious stance.
Brent crude rose around 0.5% to US$72 per barrel after US President Donald Trump said Iran had a maximum of 15 days to reach a deal on its nuclear program. Simultaneously, the US reportedly put its military presence on alert in the Middle East. This increase pushed Brent's weekly gain to over 6%.
In the stock market, Asian stock indices fell around 0.4%, tracking Wall Street's decline. However, US and European stock index futures rose around 0.3%, signaling a stabilizing sentiment. Meanwhile, the South Korean stock market rose 2.1%, extending its performance as one of the best-performing markets this year.
Safe-haven assets remained in demand. US Treasuries maintained their gains after investors sought refuge in the previous trading session. Gold prices remained around US$5,000 per ounce, while silver moved relatively flat.
The market is considered to remain in a "caution" phase as US action regarding Iran adds a new layer of geopolitical risk. This has halted a recovery in stocks that had begun to form after weeks of volatility—previously fueled by concerns about technological and AI disruption in various sectors.
Some analysts believe the market views Trump's pressure more as a negotiating tactic, but the potential for escalation still makes investors cautious. The deployment of US military assets—including aircraft carriers, fighter jets, and tankers—opens up greater options for action if negotiations stall.
Beyond Iran, market participants are also awaiting the release of US economic and inflation data on Friday, especially as the minutes of the latest Fed meeting indicate renewed concerns about price pressures. Attention is also focused on the US Supreme Court, which has scheduled its next ruling for Friday, amid global anticipation of a decision on Trump's tariffs.
Meanwhile, the US dollar is heading for its best week in four months as expectations of a Fed rate cut begin to wane, coupled with the strengthening safe-haven appeal of geopolitical pressures. The Bloomberg Dollar Index rose about 0.9% this week—the most since October—amid inflation concerns and still-strong US economic data.
Market strategies have also shifted: rising oil prices are seen as making the dollar more attractive as a safe haven asset compared to the yen, while a rising risk premium in the oil market has the potential to put pressure on riskier currencies like the Australian and New Zealand dollars.
Source: Newsmaker.id
