Asian stocks are poised for gains, with equity-index futures for Japan and South Korea pointing higher, and those for Australia remaining steady. This follows a mixed performance in US markets on Friday, where the S&P 500 fell 0.4% and the tech-heavy Nasdaq 100 advanced 0.2%. The positive sentiment in Asian tech and chip shares is attributed to a rally in US info-tech peers and optimism surrounding OpenAI's new GPT-6 technology, with South Korean chipmakers SK Hynix Co. and Samsung Electronics Co. being significant contributors to the MSCI Asia Pacific index's 1.1% rise. Hon Hai Precision Industry Co., Nvidia Corp.'s server assembly partner, also reported a 52% rise in monthly sales due to strong demand for servers.
Oil prices increased due to renewed concerns that escalating US-Iran tensions could disrupt crude supplies and stoke inflation. Brent crude climbed as much as 0.8% to trade near $97 a barrel, while West Texas Intermediate (WTI) was around $92. Iran claimed it targeted three oil tankers and several US-linked vessels in retaliation for American attacks on Iranian tankers. The US confirmed launching strikes against three Iranian oil tankers, destroying one. Iran's top security official stated a new restricted zone would be declared outside the Strait of Hormuz, extending into parts of the Persian Gulf.
Stronger-than-expected US payroll numbers released on Friday, coupled with the rise in oil prices, have increased focus on upcoming US inflation data. These factors have nudged up market bets on a potential Federal Reserve interest-rate hike in September. Elias Haddad, global head of markets strategy at Brown Brothers Harriman, noted that a September 16 Fed funds rate hike hinges on Friday's US August CPI print. A hot CPI reading would likely seal a September hike, while a cooler reading would strengthen the case for a hold.
In other market movements, the dollar traded in a narrow range against major peers, and cash trading in Treasuries was closed on Monday for a US public holiday. The yen edged higher amid speculation that Japan's Government Pension Investment Fund might increase allocations toward domestic assets and as traders considered a potential interest-rate hike by the central bank. The yen strengthened by as much as 0.3% to 155.80 per dollar. China is also injecting 300 billion yuan ($45 billion) into its largest banks and insurers as part of a significant recapitalization effort to strengthen its financial system.
