Asian stock markets reached record levels, tracking Wall Street's exceptional performance as investors maintained their focus on corporate earnings and inflation data. Market participants demonstrated remarkable resilience by prioritizing fundamental economic indicators over escalating political tensions.

Market Performance Highlights

The sustained rally across Asian markets reflects strong investor sentiment, with major indices following Wall Street's lead to achieve new peaks. This coordinated global market movement underscores the interconnected nature of international financial markets and investor confidence in underlying economic fundamentals.

Trump-Federal Reserve Tensions

Despite escalating attacks from Trump directed at the Federal Reserve, market participants have chosen to focus on concrete economic data rather than political rhetoric. This measured response demonstrates the market's ability to distinguish between policy noise and substantive economic developments that directly impact investment returns.

Investor Focus Areas

Market attention remains centered on two critical factors:

• Corporate Earnings: Investors continue monitoring company performance indicators and quarterly results
• Inflation Data: Economic indicators related to price stability remain a key consideration for investment decisions

The market's ability to maintain upward momentum while navigating political uncertainties highlights investor confidence in fundamental economic strength and corporate performance metrics.

Asian equity markets opened with gains following strong momentum from US employment data that drove American stocks to fresh record highs on Friday. The positive sentiment carried over despite growing geopolitical tensions and concerns about Federal Reserve independence that weighed on the US dollar.

Regional Market Performance

Asian markets took their cue from Friday's strong US performance, with the S&P 500 climbing 0.60% to close at an all-time high. Regional gains were broad-based across key markets:

The rally followed largely benign US employment data showing slightly fewer workers were added to the economy than economists forecast, while the unemployment rate edged down to 4.40%. Japanese financial markets remained closed Monday for a holiday, meaning no trading of cash US Treasuries occurred in Asia.

Currency and Safe-Haven Movements

The US dollar faced pressure after Federal Reserve Chair Jerome Powell revealed serious concerns about central bank independence. Bloomberg's gauge of the US currency dropped as much as 0.20% following Powell's statement about criminal threats from the Justice Department.

Powell disclosed that the Fed had been served grand jury subpoenas threatening criminal indictment over headquarters renovations. This unprecedented situation raised questions about the central bank's ability to set monetary policy independently.

Safe-haven assets responded strongly to the uncertainty:

Energy Markets and Geopolitical Tensions

Oil prices held their biggest two-day gain since October as escalating protests in Iran threatened supply from OPEC's fourth-biggest producer. The unrest raised possibilities of significant political change in the Islamic Republic, which would transform global geopolitics and energy markets.

Trump threatened repercussions if demonstrators were targeted, while Tehran warned the US and Israel against intervention. Market strategists noted the exceptional level of geopolitical uncertainty across multiple regions.

Technology Sector Developments

Asian technology shares received support from Taiwan Semiconductor Manufacturing Co.'s strong revenue results reported late last week. The company's revenue topped estimates, providing fresh momentum for the artificial intelligence trade in the region.

Market Outlook and Policy Developments

Despite recent gains, analysts highlighted the fragile nature of current market calm amid multiple uncertainties. Australian bonds rose with 10-year yields dropping two basis points, while the US 10-year yield ended Friday's session little changed.

The jobs data left expectations for additional Fed interest-rate cuts intact, though the pace of reductions remains uncertain. Major investment banks including Morgan Stanley, Barclays, and Citigroup pushed back their forecasts for Fed rate cuts later in 2026 following Friday's employment data.

Group-of-Seven finance ministers are scheduled to meet in Washington Monday to discuss rare earths, while New York Fed President John Williams and Atlanta Fed President Raphael Bostic are set to speak.