- Stocks Edge Up, Oil Gains on Israel-Iran Conflict: Markets Wrap
Investors in Asia struck a cautious tone on Monday, as an escalating conflict between Israel and Iran pushed
oil prices higher and raised wider questions about the long-run impact. As markets reopened following a
weekend of strikes between Israel and Iran, investors appeared reluctant to make big bets in either direction.
A gauge of Asian stocks was just 0.1% higher and moves were mixed across the region. Japan’s Nikkei 225 was
up 1.1%, buoyed by a weaker yen. Chinese stocks swung between small losses and gains. - Dow falls more than 700 points on Friday as attacks between Israel and Iran escalate
Stocks tumbled Friday after Israel launched a wave of airstrikes on Iran, pushing energy prices higher and
adding another complication at a time of heightened geopolitical tensions. The Dow Jones Industrial
Average fell 769.83 points, or 1.79%, ending at 42,197.79. The S&P 500 dropped 1.13% to close at 5,976.97,
while the Nasdaq Composite lost 1.30% and settled at 19,406.83. Nvidia and other stocks that have led the
market’s comeback from the April lows dropped as investors shed risk. Oil and defense stocks were
higher. Exxon added 2%, while Lockheed Martin and RTX each jumped more than 3%. The market drop began
Thursday evening as Israel’s defense minister Israel Katz declared a special state of emergency following an
Israeli attack on Iran. Two U.S. officials said that there is no U.S. involvement or assistance, according to NBC
News. On Friday, stocks’ decline worsened after Israel Defense Forces said that Iran launched missiles toward
Israel, in retaliation for Israel’s series of airstrikes. Iranian state television said Friday afternoon that Iran will
not participate in the sixth round of nuclear negotiations with the U.S. planned for this weekend. - Oil firm as intensifying Israel-Iran conflict stokes supply disruption fears
Oil prices climbed on Monday, extending Friday’s rally, as renewed strikes by Israel and Iran over the weekend
increased concerns that the battle could widen across the region and significantly disrupt oil exports from the
Middle East. Brent crude futures rose $1.12, or 1.5%, to $75.35 a barrel by 0019 GMT, while U.S. West Texas
Intermediate crude futures gained $1.10, or 1.5%, to $74.08. They had surged more than $4 earlier in the
session. Both benchmarks settled 7% higher on Friday, having surged more than 13% during the session to their
highest levels since January. The latest exchange of strikes between Israel and Iran on Sunday resulted
in civilian casualties and heightened fears of a broader regional conflict, with both militaries urging civilians on
the opposing side to take precautions against further strikes. The latest developments have stoked concerns
about disruptions to the Strait of Hormuz, a vital shipping passage. About a fifth of the world’s
total oil consumption, or some 18 to 19 million barrels per day (bpd) of oil, condensate and fuel, passes through
the Strait. - Gold hits near 2-month high as Middle East conflict boosts safe-haven demand
Gold rose for a fourth straight session to a near two-month high on Monday, as intensified clashes between
Israel and Iran over the weekend stoked fears of a broader regional conflict, pushing investors towards safe
haven assets. Spot gold gained 0.3% to $3,442.09 an ounce, as of 0246 GMT, after hitting its highest level since
April 22 earlier in the session. U.S. gold futures advanced 0.3% to $3,461.90. “It’s the joint political risk premium
that’s rising due to the Iran-Israel conflict at this point that is boosted safe-haven demand for gold,” said Kelvin
Wong, a senior market analyst, Asia Pacific at OANDA. “We have a clear break above $3,400 right now and the
short term uptrend is intact. We are seeing resistance level at $3,500 and with the possibility of breaking new
high above the $3,500 level.” Israel and Iran launched fresh attacks on Sunday, killing and wounding civilians
and raising concerns of a broader regional conflict, with both militaries urging civilians on the opposing side to
take precautions against further strikes. U.S. President Donald Trump said he hopes Israel and Iran can broker
a deal but said sometimes countries have to fight it out first. Gold often considered a safe-haven asset during
times of geopolitical and economic uncertainty. Investors this week will look forward to host of central bank
monetary policy decisions, with the spotlight on the U.S. Federal Reserve on Wednesday. The U.S. central bank
is widely anticipated to keep interest rates steady, with markets awaiting for signals on potential rate cuts in
the months ahead. Futures markets suggest expectations for two rate cuts by year-end, possibly starting in
September, bolstered by tame inflation data last week. Elsewhere, spot silver steady at $36.29 per
ounce, platinum rose 0.4% to $1,233.87, while palladium gained 1.3% to $1,040.96. - China’s May retail sales grow at fastest pace since December 2023 as subsidies help boost consumption
Retail sales jumped 6.4% from a year earlier in May, sharply beating analysts’ estimates for a 5% growth and
accelerating from the 5.1% growth in the previous month. Growth in industrial output slowed to 5.8% year-on
year in May, slightly weaker than analysts’ expectations for a 5.9% rise. Fixed-asset investment, reported on a
year-to-date basis, expanded 3.7% this year as of May from a year earlier. The urban survey-based
unemployment rate in May came in at 5.0%, the lowest level since November last year. - G-7 leaders gather in Canada for summit overshadowed by Middle East crisis and Trump’s tariffs
Leaders of some of the world’s biggest economic powers will arrive in the Canadian Rockies on Sunday for a
Group of Seven (G-7) summit overshadowed by a widening war across the Middle East and U.S.
President Donald Trump’s unresolved trade war with allies and rivals alike. Israel’s strikes on Iran and Tehran’s
retaliation, which appeared to catch many world leaders unawares, are the latest sign of a more volatile world
as Trump seeks to withdraw the U.S. from its role as world policeman. Speaking on a flight to Canada to attend
the summit, British Prime Minister Keir Starmer said he had discussed efforts to de-escalate the situation with
Trump and Israeli Prime Minister Benjamin Netanyahu, as well as other world leaders. Britain is sending Royal
Air Force jets and other military reinforcements to the Middle East. “We do have longstanding concerns about
the nuclear program Iran has. We do recognize Israel’s right to self-defense, but I’m absolutely clear that this
needs to de-escalate. There is a huge risk of escalation for the region and more widely,” Starmer said, adding
he expected “intense discussions” would continue at the summit. - ‘Tehran will burn:’ Israel and Iran strike at each other in new wave of attacks
Israel and Iran launched fresh attacks on each other late on Saturday, stoking fears of a wider conflict after
Israel expanded its surprise campaign against its main rival with a strike on the world’s biggest gas field. Tehran
called off nuclear talks that Washington had said were the only way to halt Israel’s bombing, while Israeli Prime
Minister Benjamin Netanyahu said the attacks were nothing compared with what Iran would see in the coming
days. Israel’s military said more missiles were launched from Iran towards Israel late on Saturday, and that it
was working to intercept them. It also said it was attacking military targets in Tehran. Iranian state television
said Iran had launched missiles and drones at Israel. Several projectiles were visible in the night sky over
Jerusalem late on Saturday. Air raid sirens did not sound in the city, but were heard in the northern Israeli city
of Haifa. Israel’s ambulance service said a woman in her 20s was killed and 13 other people injured when a
missile struck a two-story house in northern Israel. Iran said the Shahran oil depot in Tehran was targeted in
an Israeli attack but that the situation was under control. U.S. President Donald Trump had warned Iran of
worse to come, but said it was not too late to halt the Israeli campaign if Tehran accepted a sharp downgrading
of its nuclear program. A round of U.S.-Iran nuclear talks due to be held in Oman on Sunday was canceled, with
Iranian Foreign Minister Abbas Araqchi saying the discussions could not take place while Iran was being
subjected to Israel’s “barbarous” attacks. In the first apparent attack to hit Iran’s energy infrastructure, the
semi-official Tasnim news agency said Iran partially suspended production at the world’s biggest gas field after
an Israeli strike caused a fire there on Saturday. The South Pars field, offshore in Iran’s southern Bushehr
province, is the source of most of the gas produced in Iran. Fears about potential disruption to the region’s oil
exports had already driven up oil prices 9% on Friday even though Israel spared Iran’s oil and gas on the first
day of its attacks. An Iranian general, Esmail Kosari, said on Saturday that Tehran was reviewing whether to
close the Strait of Hormuz controlling access to the Gulf for tankers. - Shares in Visa and Mastercard fell 5% and 4.6% respectively on Friday after the Wall Street Journal
reported large merchants, including Walmart and Amazon.com, are exploring how to issue or use stablecoins
to bypass the traditional fees of card-based systems
Some analysts say the negative reaction is overdone and any weakness in shares can be viewed as an attractive
buying opportunity, with some seeing broad based stablecoin adoption as unlikely. William Blair analyst
Andrew Jeffrey: Encouraging investors to buy shares of Visa and Mastercard. “Do not believe stablecoins are
well suited for B2C commerce, even as merchants view them as a potential means of lowering card acceptance
costs”. “Visa and Mastercard are building stablecoin infrastructure that can support commerce on their rails,
positioning them to continue partnering with banks for issuance while possibly lowering merchants’
acceptance costs”. Bloomberg Intelligence analyst Diksha Gera: Share declines “reflect fears that stablecoins
could erode volume share and margin, yet we believe such worries are premature”. “Visa and Mastercard have
proactively integrated stablecoin capabilities, while lingering trust and regulatory hurdles, along with a
prolonged adoption curve by consumers, might impede widespread adoption”. - Santos shares soar over 15% on ADNOC-led group’s $18.7 billion takeover bid
Shares of Santos surged as much as 15.23% Monday, after it received a non-binding takeover offer of $18.72
billion by an Abu Dhabi’s National Oil Company-led group. The move marks the biggest intraday jump in the
Australian oil and gas producer’s shares since April 2020, LSEG data shows. The takeover bid led by ADNOC’s
investment arm XRG follows two confidential, non-binding and indicative proposals from the same consortium
on Mar. 21 and Mar. 28, Santos noted in a Monday announcement. The consortium also includes the Abu Dhabi
Development Holding Co and global private equity firm Carlyle Group. It has offered a cash offer price of $5.76
(8.89 Australian dollars) per Santos share, which translates to a 27.73% premium from its closing price of
AU$6.96 ($4.52) last Friday. Santos’ board said it intends to “unanimously recommend” the company’s
shareholders to vote in favor of the potential transaction, in the absence of a superior proposal. XRG’s takeover
bid comes as the investment firm – which has an enterprise value of over $80 billion – has been on the hunt
for deals in the natural gas, chemicals, and lower-carbon energy solutions space. Santos has had unsuccessful
takeover attempts in the past few years given its poor share price movements. The company
reportedly rejected offers from U.S.-based Harbour Energy, while its merger with Australian energy
player Woodside Energy Group fell apart after both companies failed to agree on the valuation. Still, Santos
has remained an attractive takeover target, especially among players in the Middle East. The acquisition of
Santos would give the consortium control of two Australian liquefied natural gas operations – Gladstone LNG
on the east coast and Darwin LNG in the north of Australia – as well as stakes in PNG LNG and the undeveloped
Papua LNG. - Energy giants Baker Hughes, Woodside shy away from making oil forecasts as Iran-Israel conflict escalates
The CEOs of two major energy companies are monitoring the developments between Iran and Israel — but
they aren’t about to make firm predictions on oil prices. Both countries traded strikes over the weekend, after
Israel targeted nuclear and military facilities in Iran on Friday, killing some of its top nuclear scientists and
military commanders. Speaking at the Energy Asia conference in Kuala Lumpur on Monday, Lorenzo Simonelli,
president and CEO of energy technology company Baker Hughes, told CNBC’s “Squawk Box Asia” that “my
experience has been, never try and predict what the price of oil is going to be, because there’s one sure thing:
You’re going to be wrong.” Simonelli said the last 96 hours “have been very fluid,” and expressed hope that
there would be a de-escalation in tensions in the region. “As we go forward, we’ll obviously monitor the
situation like everybody else is. It is moving very quickly, and we’re going to anticipate the aspect of what’s
next,” he added, saying that the company will take a wait-and-see approach for its projects. At the same
conference, Meg O’Neill, CEO of Australian oil and gas giant Woodside Energy, likewise told CNBC that the
company is monitoring the impact of the conflict on markets around the world. She highlighted that forward
prices were already experiencing “very significant” effects in light of the events of the past four days. If supplies
through the Strait of Hormuz are affected, “that would have even more significant effects on prices, as
customers around the world would be scrambling to meet their own energy needs,” she added. As of Sunday,
the Strait remained open, according to an advisory from the Joint Maritime Information Center. It said, “There
remains a media narrative on a potential blockade of the [Strait of Hormuz]. JMIC has no confirmed information
pointing towards a blockade or closure, but will follow the situation closely.” Iran was reportedly
considering closing the Strait of Hormuz in response to the attacks. - Nippon Steel shares rise after Trump approves $14.9 billion US Steel bid
Nippon Steel shares rose on Monday after U.S. President Donald Trump approved its $14.9 billion bid for U.S.
Steel, clearing a key hurdle in its 18-month pursuit and securing access to a vital market for its growth strategy.
The approval capped a tumultuous process marked by union resistance and two national security reviews.
Shares of Nippon, the world’s fourth-largest steelmaker, gained 3% to 2,915 yen by the mid-day break after
being untraded with a glut of buy orders earlier in the day. They outperformed Tokyo’s benchmark Nikkei 225
index, which was up about 1%. On Friday, Trump signed an executive order allowing the tie-up to proceed,
contingent on an agreement with the Treasury Department addressing national security concerns. The
companies then announced they had signed the agreement, effectively clearing the deal. The agreement
includes $11 billion in new investments by 2028, along with commitments on governance, production and
trade. Nippon Steel also confirmed plans to acquire 100% of U.S. Steel’s ordinary shares. “Investors have
welcomed the resolution of uncertainty surrounding the deal,” said Shinichiro Ozaki, senior analyst at Daiwa
Securities. “Overall, the agreement appears relatively reasonable in both investment size and timeframe,” he
said, noting the acquisition is central to Nippon Steel’s medium- to long-term growth strategy. The deal would
boost Nippon Steel’s annual production capacity to 86 million metric tons from 63 million tons. - Intellia Therapeutics Announces Positive Three-Year Data from Phase 1 Trial of Lonvoguran Ziclumeran
(lonvo-z) in Patients with Hereditary Angioedema (HAE) at the European Academy of Allergy and Clini
With up to three years of follow-up, a single dose of lonvo-z led to a 98% mean reduction in monthly HAE attack
rate in all 10 patients. All 10 patients were attack-free and treatment-free for a median of 23 months through
the latest follow-up, demonstrating the potential of lonvo-z to become the first one-time therapy for most HAE
patients. Lonvo-z was well tolerated and continues to demonstrate a favorable safety profile. The global Phase
3 HAELO trial of lonvo-z has concluded screening ahead of schedule with more than half screened from U.S.
sites; Intellia to provide an update on enrollment in the future.
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