Asian Markets Slide Amid US-Iran War and AI Uncertainty

Asian stock markets, including Japan's Nikkei 225, South Korea's Kospi, and China's Shanghai Composite, declined on Monday. The downturn follows losses on Wall Street and reflects investor caution amid an ongoing war between the United States and Iran. This conflict has severely reduced global oil supplies and increased costs for food and fuel, though oil prices fell more than 1% on Monday after hitting a four-year high last week.

Geopolitical instability has been exacerbated by warnings from Iran that U.S. and Israeli strikes would trigger responses against Persian Gulf airports and oil pipelines. Additionally, Iran-backed Houthi militias recently attacked the Shaybah oil field in Saudi Arabia, though operations there remain unaffected.

Beyond conflict, markets are bracing for a Federal Reserve meeting this week. While rates are expected to hold steady, analysts anticipate a potential December hike to combat U.S. inflation, which remains above 3%. Investors are also awaiting earnings reports from Alphabet, Microsoft, and Amazon. Stephen Innes of SPI Asset Management noted that Big Tech must now demonstrate that massive investments in AI are building a durable earnings machine rather than acting as a capex furnace.