Asia Market Quick Take – 04 June, 2026

Key points:

• Macro: US-Iran tensions escalate; Iran hits US bases in Kuwait and Bahrain
• Equities: Broadcom down 13% after-hours on AI chip outlook miss
• FX: Dollar stays firm on Middle East tensions; USDJPY near 160 again
• Commodities: Oil extends gains and gold slips on dollar strength
• Fixed income: Treasuries fall on strong ADP numbers

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Escalating US–Iran tensions are undermining prospects for a peace deal and normal Middle Eastern energy flows. After a US strike on an Iran-bound tanker, Iran hit US bases in Bahrain and Kuwait and targeted commercial ships. Strait of Hormuz traffic—vital for about one-fifth of global oil and LNG—remains below pre-conflict levels despite a recent modest pickup.
• ISM Services PMI rose to 54.5 in May from 53.6 in April, beating expectations and marking a three-month high. Business activity, new orders, and inventories strengthened, while employment contracted for a third month amid hiring freezes. Price pressures hit their highest since August 2022, driven by fuel and petroleum-related products, as backlog growth slowed and supplier delivery performance weakened further.
• US private payrolls rose by 122,000 in May, the strongest gain since January 2025 and above expectations. Hiring was broad-based, led by education and health services and trade/transportation/utilities, while natural resources/mining and information lost jobs. Small firms added 67,000 jobs, large 40,000, and midsize 17,000. Pay growth held at 4.4% for job-stayers and rose to 6.6% for job-switchers.
• The US administration vowed to impose 10%–12.5% tariffs on major trading partners, including the EU and UK, over alleged links to goods produced with forced labor.
• US factory orders rose 4.8% in April to $662.7 billion, the strongest gain in 11 months and above expectations. Durable goods jumped 8%, led by a surge in nondefense aircraft and transportation, with gains in fabricated and primary metals, while computers and electronics slipped 0.7%. Nondurable goods orders increased 1.4%.

Equities: 

• US: Wall Street snapped a nine-day winning streak on Wednesday as renewed US-Iran clashes drove oil higher. The S&P 500 fell 0.7%, the Dow dropped 1.2% (over 600 points) and the Nasdaq slid 0.9% to 26,853.98 — its largest single-day decline since 15 May. In after-hours trade, Broadcom fell 13% aftermarket despite reporting record Q2 revenue of $22.2 billion and Q3 guidance of $29.4 billion that beat consensus, as the AI chip revenue outlook disappointed elevated expectations. PVH sank 21% after hours. CrowdStrike fell 10% after reporting a 15% jump in Q1 operating expenses. Costco reported May comparable sales up 12.5%, while Veeva reported solid Q1 results though shares dipped on profit-taking.
• EU: European equities fell Wednesday as escalating Middle East tensions weighed on sentiment. The Stoxx 600 dropped 0.7%, the DAX shed 1.3%, the FTSE 100 declined 0.4%, and the Euro Stoxx 50 fell 0.9% to 6,053.57. Akzo Nobel was the session's worst performer, plunging 17.2%. SAP fell 4.3%. Inditex bucked the trend, rising 5.6% after reporting reassuring earnings. Post-close, Hochtief was confirmed as a new DAX constituent, replacing Porsche Automobil Holding from 22 June. Aberdeen, Computacenter and Investec were confirmed as new FTSE 100 additions.
• Asia: Asian markets are trading lower Thursday morning, tracking Wall Street's overnight decline and the deterioration in US-Iran ceasefire prospects. The Kospi opened sharply lower, falling 2% to 8,623.82, giving back some of its extraordinary year-to-date gains of over 100%. The Hang Seng was down approximately 1.6% in Wednesday's session. The Taiex had risen 2% on Wednesday, led by semiconductors, after Goldman Sachs upgraded Taiwan to overweight with a 12-month target of 51,000 and raised its Kospi target to 12,000. South Korea's market capitalisation has surpassed India's to become the world's sixth largest. The Nikkei and STI are also under pressure as risk-off sentiment dominates the open.

Earnings this week:

• Thursday: Ciena, Samsara, Planet Labs, Lululemon, Rubrik
• Friday: Sectra, Mr Price Group, ABM Industries, Foschini Group