GLOBAL MARKETS: Share futures wobble, dollar gains as Gulf talks teeter

Sydney — The U.S. dollar rose in Asian trading on Monday as markets reacted to signs that negotiations between the United States and Iran had stalled, raising concerns over global energy supply as the Strait of Hormuz remained effectively disrupted and oil prices pushed higher.

U.S. stock futures traded unevenly, while equities in Asia saw selective gains, led by artificial intelligence-related shares that supported benchmark indexes in Tokyo and Seoul.

Markets were shaken after U.S. President Donald Trump rejected Iran’s response to a U.S. proposal aimed at ending the conflict, calling Tehran’s demands “totally unacceptable.” Iranian media reported that Tehran’s counterproposal emphasized a comprehensive ceasefire, the lifting of sanctions, reparations, and formal recognition of its control over the strategic maritime route of the Strait of Hormuz.

Bruce Kasman, global head of economics at JPMorgan, said the Middle East conflict has now entered its 11th week, warning that rising energy prices are beginning to weigh on growth, though not yet at levels that would halt expansion. He added that risks of a sharper economic impact increase the longer disruptions persist in the Strait.

Crude oil prices surged in early trading, with Brent futures rising 3.3% to $104.67 a barrel and U.S. West Texas Intermediate climbing 3.5% to $98.82 a barrel.

The dollar strengthened as investors sought safety amid geopolitical uncertainty, edging up 0.2% against the yen to 156.88. The euro slipped 0.2% to $1.1760.

In Japan, officials are reportedly banking on a more hawkish stance from the Bank of Japan and potential backing from U.S. Treasury Secretary Scott Bessent to support efforts aimed at stabilizing the weakening yen.

Both Europe and Japan remain heavily exposed to higher energy prices as major oil importers, while the United States continues to benefit as a net exporter.

In equity markets, S&P 500 futures dipped 0.1% and Nasdaq futures fell 0.2%, pausing after last week’s record highs driven by strong corporate earnings and a solid U.S. payrolls report.

Investor attention this week is focused on major corporate earnings, including Cisco Systems and Applied Materials, while heavyweight reports from Nvidia and Walmart are expected later in the month.

In Asia, Japanese equities continued to catch up with Wall Street’s gains, with the Nikkei index rising 0.8% in early trading. South Korea’s KOSPI surged nearly 5%, driven by strength in semiconductor stocks.

Diplomatic tensions are also expected to feature in upcoming discussions when Trump visits China from Wednesday for talks with President Xi Jinping, marking their first face-to-face meeting in more than six months. Trade, Taiwan, artificial intelligence, nuclear security, and the possible extension of a critical minerals agreement are expected to dominate the agenda.

In commodities, gold eased 0.5% to $4,690 an ounce, reflecting limited safe-haven demand despite heightened geopolitical risk.

— Reporting by Wayne Cole; Editing by Edmund Klamann / Reuters