Global equities extended gains as investors continued to buy the dip in technology stocks ahead of a crucial earnings wave from megacap names including Alphabet, Microsoft, Amazon, and Meta. Futures on the Nasdaq 100 rose 0.5%, with broader S&P 500 futures also edging higher, as markets positioned for what could determine whether the recent rally has further legs.
Macroeconomic data from the US added to the supportive tone. Durable goods orders came in stronger than expected at 0.8%, while housing starts rose to 1.502M, signalling resilience in parts of the US economy. However, mixed building permits and ongoing inflation sensitivity kept Fed expectations firmly in focus ahead of this week’s policy decision.
Geopolitical tensions remained a key driver. Markets continued to monitor developments around the Strait of Hormuz, with renewed concerns after reports of potential US naval escalation against Iran. Brent crude remained volatile, holding elevated levels above $111–$115 amid supply disruption risks, while Iran warned of unprecedented retaliation over US-linked seizures. Energy markets were further supported by policy discussions between US leadership and major energy firms focusing on production, shipping, and oil flows.
In corporate and strategic energy headlines, uncertainty grew following reports of shifts within OPEC dynamics, including the UAE reassessing its role, while major producers like Total signalled caution on regional operations until stability returns.
In Asia, sentiment remained broadly positive, with AI-driven momentum continuing to support equities, helping the MSCI Asia Pacific index extend its strong monthly performance. Gold edged higher near $4,600/oz as investors balanced inflation risks and geopolitical uncertainty, while Bitcoin climbed to around $77,000, leading gains across digital assets.
Treasuries were mixed as rising oil prices lifted inflation expectations, tempering bets on near-term Fed rate cuts. Meanwhile, European markets were set for a modestly positive open, tracking global risk sentiment.
Overall, markets remain at a critical inflection point, with tech earnings and the Federal Reserve decision set to determine whether the risk-on momentum can be sustained amid persistent geopolitical and inflationary pressures.
By Amir Amidian
Senior Market Analyst | Zylostar
Frequently Asked Questions
1. Why are technology stocks leading the market rally?
Technology shares are being bought on the dip as investors position ahead of major earnings from megacap companies like Alphabet, Microsoft, Amazon, and Meta. Strong expectations around AI-driven growth are also supporting sentiment.
2. What are the key US economic data releases in focus?
Recent data showed Durable Goods at 0.8% (above expectations) and stronger Housing Starts at 1.502M, indicating resilience in parts of the US economy. However, mixed signals from permits keep the Fed outlook uncertain.
3. How is the Middle East situation impacting oil prices?
Geopolitical tensions, especially around the Strait of Hormuz, are keeping oil volatile. Brent crude remains elevated above $111–$115 as supply disruption risks persist.
4. What is driving inflation concerns in markets?
Higher energy prices, particularly oil, are pushing inflation expectations higher again. This is reducing market bets on near-term Fed rate cuts and keeping bond yields sensitive.
5. Why is the Strait of Hormuz important for markets?
It is one of the world’s key oil transit routes. Any disruption could significantly impact global oil supply, pushing energy prices higher and increasing inflation risks globally.
