Asian stocks slide as oil, geopolitics weigh before earnings

what happened

According to Newsmetry API, Asian equities fell sharply on Tuesday as an expanding Middle East conflict kept oil prices elevated and supported the dollar. Brent crude futures stood at $105.9 per barrel, close to a two-week high. Investors were also weighing developments involving the Middle East and Russia-Ukraine, while preparing for an earnings season expected to shape the market’s direction through the rest of the year.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MISX00000PUS) dropped 2% in early trading, while South Korea’s tech-heavy KOSPI slid 6%. Japan’s Nikkei sank 2.6% after returning from a holiday. The tech-heavy Nasdaq had fallen 0.5% overnight, pressured by chipmakers as investors questioned how durable the rally in AI stocks would be amid stronger competition between the US and China.

Attention was also turning to US bank results. JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo, four of the six largest US lenders, were due to report later in the day. Investors will examine the figures for signs of how higher Treasury yields are affecting dealmaking, lending growth and funding costs. The 10-year Treasury yield was down 2.9 basis points at 5.214% in Asian hours, remaining near the 24-year high of 5.364% reached last week.

why it matters

Higher oil prices add to inflation concerns and can keep pressure on bond yields, weighing on expensive growth stocks. Bank earnings may provide an early indication of how elevated borrowing costs are affecting credit demand, funding expenses and household spending.

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