Asian markets mixed as Middle East tensions flare

June 29, 2026 (MLN): Asian markets traded mixed on Monday as investors reacted to renewed military escalation between the United States and Iran, while monitoring the potential impact on global energy supplies and financial markets.

Japan led regional declines, with the Nikkei 225 falling 0.8% and the Topix easing 0.24%. South Korea's Kospi dropped 1.48%, although the small-cap Kosdaq surged 7.32%.

Australia's S&P/ASX 200 gained 0.38%, while Hong Kong's Hang Seng Index climbed 2.13%. Mainland China's CSI 300 edged up 0.06%.

U.S. stock futures pointed to a firmer start on Wall Street despite the geopolitical uncertainty. Dow Jones Industrial Average futures rose 164 points, or 0.3%, while S&P 500 futures advanced 0.6%. Nasdaq-100 futures outperformed with a gain of 0.7%.

Investor sentiment remained focused on developments in the Middle East after fresh military action heightened concerns that the conflict could persist for longer than previously anticipated, according to CNBC.

The United States carried out strikes on Iranian military facilities over the weekend in response to attacks attributed to Tehran near the Strait of Hormuz. Following the operation, U.S. President Donald Trump warned of further action if ceasefire violations continued.

Meanwhile, a Pakistani source familiar with ongoing diplomatic efforts told MS NOW that negotiations aimed at ending the conflict have been temporarily suspended.

However, representatives from the involved parties remain in Switzerland, allowing talks to resume when conditions permit.

Oil prices moved higher as traders assessed the risk of additional disruptions to global crude supplies. Brent crude futures rose 0.8% to $72.57 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 1.1% to around $70 per barrel.

The latest geopolitical developments come after a mixed performance on Wall Street last week. The technology-heavy Nasdaq Composite fell more than 4.6%, while the S&P 500 lost nearly 2% as investors rotated away from major technology stocks.

Nvidia and Alphabet each declined more than 8%, while Meta Platforms, Apple, and Amazon recorded losses exceeding 4%. SpaceX also experienced a sharp 17% decline.

In contrast, the Dow Jones Industrial Average outperformed, gaining 0.6% during the week, supported by strong advances in healthcare stocks, with Merck and Johnson & Johnson leading the benchmark's gains.

Market participants are also reassessing the outlook for artificial intelligence-related investments, with growing concerns over whether the substantial capital spending by major technology companies will generate the expected long-term returns amid rapidly evolving technologies.

The final week of June trading begins with major U.S. indices still under monthly pressure. As of Friday's close, the S&P 500 was down about 3% for the month, while the Nasdaq had fallen more than 6%.

The Dow Jones Industrial Average, however, remained in positive territory with a monthly gain of over 1%.

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