Asian markets opened Monday with the usual split-screen of profit and panic: stocks in Japan and South Korea surged to fresh records while oil prices slipped on optimism over progress in U.S.-Iran negotiations. The gains flowed to technology and chip companies, while the costs of war, sanctions, and energy disruption remained lodged where they always land — on ordinary people, transport routes, and the wider economy.
Who Gets the Gains
Tokyo’s Nikkei 225 jumped 1.6% and ended at another all-time record of 72,353.96, driven by technology stocks riding the global artificial intelligence boom. Japan’s SoftBank Group, described as a multinational investment holding company with a strong AI focus, rose 1.9%, and chip equipment maker Tokyo Electron was up 3.2%. South Korea’s Kospi gained 0.7% to 9,114.55, also a record closing high, helped by AI-related shares, while memory chip maker SK Hynix surged 5.6%.
The Nikkei 225 and Kospi were up more than 40% and 120%, respectively, over the past six months, and both benchmark indexes have been setting fresh records in recent days on AI enthusiasm and positive developments from the Iran war. The numbers read like a celebration for capital, with the biggest rewards concentrated in the hands of firms positioned to profit from speculation, chips, and the latest technological gold rush.
Who Pays for the “Progress”
Oil prices fell as talks progressed over a permanent end to the Iran war. Brent crude, the international standard, was trading 1.1% lower at $79.70 per barrel, after being at roughly $70 a barrel before the start of the war in late February. The market’s relief is tied to the possibility of calmer shipping and cheaper energy, but the underlying reality is that a war has already distorted prices, trade, and movement across the region.
High-level negotiations in Switzerland between the U.S. and Iran concluded early Monday, with lower-level technical talks set for the rest of the week. Mediators Qatar and Pakistan said “encouraging progress” was made during the negotiations. Iran said the Strait of Hormuz, a key waterway for oil and gas transport, was shut again over the weekend, while the U.S. said traffic had continued. The competing claims show how control over a narrow maritime chokepoint becomes another arena where states, militaries, and energy interests fight over the flow of wealth and fuel.
What the Brokers Call Stability
Neil Newman, managing director and head of strategy at Astris Advisory Japan, said, “We’re seeing another strong market today,” and cautioned that the Japanese market is “probably getting a little stretched” from an investor’s point of view, “especially with what’s going (on) in the Middle East.” His comments capture the distance between financial exuberance and the material instability underneath it: markets can climb while the region remains shaped by war, blockade fears, and the threat of renewed escalation.
ING commodities strategists Warren Patterson and Ewa Manthey wrote in a commentary on Monday that “Moving towards a more permanent deal will be challenging, with very real risks of a flare-up in hostilities.” Thomas Mathews, head of Markets, Asia Pacific of Capital Economics, said energy flows in the strait are more likely to recover only gradually. “With the controversial — and fragile — U.S.-Iran peace process now underway, attention is turning to how quickly tankers return to the Strait of Hormuz to load energy supplies,” he wrote in a note.
Elsewhere in Asia, Hong Kong’s Hang Seng lost 0.6% to 23,785.50, while the Shanghai Composite index was 1.8% higher at 4,163.10. Australia’s S&P/ASX 200 was down 0.1% to 8,816.10. Taiwan’s Taiex rose 2.8%, and India’s Sensex was up 0.4%. U.S. futures were trading lower.
In the U.S., investors were also monitoring May’s personal consumption expenditures price index, or PCE, the preferred inflation gauge of the Federal Reserve, due to be released Thursday. In other dealings, the U.S. dollar rose to 161.76 Japanese yen from 161.22 yen, and the euro was trading at $1.1445, down from $1.1473. The machinery of finance keeps moving, measuring, and pricing every tremor, while the people living through war and energy disruption remain the ones absorbing the shock.