Geopolitics vs. Technology: How Iran, the Fed, and Asia's Records Open a New Week in the Markets

Global financial markets enter a new trading week in a state of heightened volatility. The main driver is the sharply escalated geopolitical backdrop surrounding the USA and Iran. Investors are simultaneously receiving statements about de-escalation, news of US strikes on targets in southern Iran, and conflicting signals regarding the opening of the Strait of Hormuz. Oil is experiencing sharp swings, the dollar is losing ground, and traders are revising their expectations for the Fed rate.

📈 USA: Futures Rise, but the Market Remains Tense

After the weekend, US futures confidently open the week with gains: Nasdaq 100 Futures +0.9% · S&P 500 Futures +0.7% · Dow Jones Futures +0.6%. The technology sector remains the main focus, but the market is no longer reacting as aggressively — investors are beginning to fear that the Fed may maintain a tight policy much longer than expected.

According to CME FedWatch, the probability of a Fed rate hike in July has risen to 8.5% — a month ago, the market virtually ruled out such a scenario. In focus today: Zscaler report, consumer confidence, Dallas Fed data, and the S&P Case-Shiller home price index.

Europe: Markets Rise, but the ECB Becomes Tougher

European markets started the day in positive territory: Euro Stoxx 50 +1.0% · FTSE 100 +0.2%. Support for the markets comes from a local decline in energy prices and hopes for stabilization in the Middle East.

At the same time, pressure from the ECB is increasing: regulator representative Isabel Schnabel warned that inflation in the Eurozone could accelerate to 4% by the end of the year if the energy crisis intensifies again. The market is beginning to realize: the ECB may be much more "hawkish" than previously expected.

🌏 Asia: South Korea Hits Historical Records

The Asian region is once again showing one of the strongest dynamics in the world. KOSPI soared more than 3.2% and set a historical maximum of 8094 points. The main drivers: the technology sector, expectations of de-escalation in the Middle East, and strong demand for semiconductors and AI infrastructure.

Japan appears more restrained: Nikkei 225 corrects by 0.4% after breaking the historical mark of 65,000 points the day before. The Bank of Japan continues to discuss further rate hikes, which is gradually increasing pressure on the market.

🛢 Oil is Swinging

After yesterday's plunge of nearly 7%, the oil market is trying to recover: Brent — $97.5–98 · WTI — around $91.5. However, a full reduction in tension is hindered by Tehran's statements about possible regulations and tariffs on ships passing through the Strait of Hormuz.

The oil market is currently living literally from headline to headline. Any news regarding Iran can turn the market by several percent in minutes.

Gold Declines — Dollar and Crypto Hold Steady

Gold is losing about 0.8% and dropping to $4533 per ounce amid a local weakening of the geopolitical premium and increased interest in risk assets. The dollar index DXY is moderately declining to 99 points — traders are cutting long positions in USD after stabilization around trade routes.

The crypto market looks surprisingly resilient: Bitcoin — $76,500–76,800 · Ethereum — around $2100. Additional positivity for the sector came from the approval of cryptocurrency options on Nasdaq, which enhances institutional interest in digital assets.

⚡ In focus today: US futures open higher after the weekend · KOSPI at a historical maximum of 8094 · Brent recovers to $98 after a 7% drop · ECB warns of inflation up to 4% · approval of crypto options on Nasdaq · Zscaler report and US consumer confidence data.