Asia Market Quick Take – 25 May, 2026

Key points:

• Macro: US-Iran near Hormuz reopening deal, Singapore GDP beats forecasts
• Equities: Nikkei up 3%, Topix at record highs on Hormuz hopes, tech rally
• FX: Dollar weakens broadly as Iran deal hopes boost global risk appetite
• Commodities: Brent crude fell more than 5% below $100
• Fixed income: Treasury futures extend gains as yield decline

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Disclaimer: Past performance does not indicate future performance.

Macro:

• The US and Iran are closing in on a deal that would reopen the Strait of Hormuz, though negotiations over key language were continuing and final approval from both sides could still take several days. President Donald Trump said he won't "rush" into an agreement.
• US PCE inflation figures will likely mark the highlight among economic data due this week as investors increasingly anticipate that the Federal Reserve's next move will be to raise interest rates.
• Singapore's economy expanded faster than expected in the first quarter, with GDP growing a seasonally adjusted 1% quarter-on-quarter versus the government's advance estimate of a 0.3% contraction. Year-on-year growth came in at 6% versus an estimate of 5.2%. Singapore maintained its 2026 growth estimate between 2.0% and 4.0%.
• Bond investors aren't just worried about price pressures from the Iran war, as so-called real yields have had a greater impact on longer-term borrowing costs. Other culprits include signs already large public debt burdens will swell even further and fallout from AI investment.

Equities: 

• US: US stocks closed higher on Friday, May 23, supported by lower Treasury yields and hopes that the war in the Middle East could end soon, helping Wall Street post an eighth consecutive week of gains. The Dow Jones Industrial Average rose 0.58%, or 294 points, to 50,579, marking a record closing high and weekly gains of 2.12%. The S&P 500 gained 0.37%, or 27 points, to 7,473, extending its winning streak to eight weeks. Consumer durables and discretionary stocks outperformed after solid earnings reports. Pershing Square stock tumbled into a bear market, pulling back 35% to $35.67 from its high of $54.90 after its April IPO, bringing its market capitalization to $14.2 billion.
• EU: European stocks rose for a fifth straight session on Friday, May 22, closing at a one-month high as a strong earnings season and hopes for a peace deal between the US and Iran boosted sentiment. The Stoxx Europe 600 Index gained 0.7% to 625.12 and was up 3% for the week. The DAX rose 1.15% to 24,888.56, the FTSE 100 gained 0.2% to 10,466.26, and the Euro Stoxx 50 advanced 0.99%. Tech shares spanning from ASML to Nokia outperformed amid a rotation into companies tied to the AI buildout. ASML rose 4.7%, Nokia soared 9.6%, Infineon gained 8%, and STMicroelectronics increased 4.7%.
• Asia: Asian equity markets traded higher on Monday, May 25, with Japan's Topix Index trading above its record-high closing level. The Nikkei Stock Average rose 3% to 65,241 on hopes for a potential US-Iran peace deal. Chip and construction stocks led the gains, with Kioxia Holdings up 5.3% and Taisei 7.8% higher. Taiyo Yuden shares jumped 17%, touching the upper daily limit, while Murata Manufacturing rose 11% and Yaskawa Electric climbed as much as 9.2% after announcing a medium-term business plan. In South Korea on Friday, May 22, the Kospi rose 0.4% with the index gaining 4.7% for the week as shipbuilding and defense stocks advanced. Xiaomi preparing for Q1 2026 earnings on May 26. Singapore's Straits Times Index rose 0.4% to 5,068.15 on Friday, up 22.44 points, with Keppel rising 4.7%.

Earnings this week:

• Monday: SATS
• Tuesday: Xiaomi, Zscaler
• Wednesday: Kuaishou, CSPC Pharmaceutical, Kingsoft, Scotiabank, HP, Salesforce, Snowflake, Marvell Technology, PDD Holdings, Synopsys
• Thursday: Li Auto, Costco, Best Buy, Okta, Royal Bank of Canada

FX:

• USD weakened against all its G10 peers as news of the US and Iran inching closer toward a deal bolstered risk appetite. AUD and NZD, sensitive to swings in market sentiment, gained more than 0.4% against the greenback in early Asia trading.
• EUR gathered strength to near 1.1650 on US-Iran peace progress, quoted 0.3% higher at 1.1641 in early Sydney trading.
• JPY edged higher to near 159.00, down 0.2% to 158.89, keeping traders on alert for intervention as holidays from London to New York reduce liquidity. Bearish yen wagers by leveraged funds are their most elevated since early 2024.
• NOK has become the best performing G10 currency year-to-date, up 8.89% against the US dollar, while the SEK has become the worst performer, down 1.75%.

Commodities:

• Brent crude dropped more than 5% to about $98 a barrel as the US and Iran appeared to close in on a deal. Front-month WTI crude oil futures fell 5.2% to $91.62 per barrel. Oil fell in early Asian trade amid prospects for reopening of the Strait of Hormuz, a key waterway through which one-fifth of the world's oil is typically transported.
• Gold rose to around $4,564 an ounce after falling 0.7% on Friday, as signs that the US and Iran were closing in on a deal that would reopen the Strait of Hormuz tempered inflation concerns.

Fixed income:

• Treasury 10-year note futures rose 14/32 to 109 22/32 as hope for a deal between the US and Iran triggered a drop in oil prices. The JGB 10-year yield fell 2.5 basis points to 2.735% amid declining oil prices.
• Bond investors are pricing in that the Fed is virtually certain to start raising rates by December as the Iran war unleashed the biggest inflation surge since 2023. This is a sharp reversal from just three months ago, when markets were betting there were deeper cuts ahead.
• Strategists warn yields are likely to stay high even if the Iran war ends, as so-called real yields have had a greater impact on longer-term borrowing costs. Other culprits include signs already large public debt burdens will swell even further and fallout from AI investment.

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