Asian equities and US stock futures advanced as risk appetite stabilised following last week’s sharp technology selloff. The MSCI Asia Pacific Index gained 0.1%, supported by South Korean and Hong Kong shares, while S&P 500 and Nasdaq 100 futures rose at least 0.5%. The recovery followed a difficult session on Wall Street, where the Nasdaq 100 fell 3.5% and the Philadelphia Semiconductor Index dropped 7.2%.

Chinese equities outperformed after financial regulators announced plans to meet banks and securities firms to discuss measures supporting the capital market. The move signals renewed efforts to stabilise domestic stocks. Meanwhile, the People’s Bank of China launched daily overnight reverse repurchase operations under a revised liquidity framework, making the short-term tool its primary policy anchor.

Oil prices moved lower, with Brent crude falling around 3% to $109.87 a barrel. Markets reacted to reports that President Donald Trump wants to give diplomacy with Iran more time before considering a resumption of military strikes following Tuesday’s US midterm elections. However, Tehran’s position remains firm. Foreign Ministry spokesperson Esmaeil Baghaei said Iran sees no new basis for negotiations following a letter from US Vice President JD Vance, insisting that sanctions must be lifted before the Strait of Hormuz can reopen. He also said Iran’s seven-step proposal remains the basis for diplomacy, with a possible opportunity for implementation in the coming days.

The Persian Gulf remains a major source of geopolitical risk. Gulf states are concerned that another US-Israeli attack could trigger a more destructive regional conflict, potentially disrupting energy infrastructure and shipping routes. Although the prospect of renewed diplomacy has eased oil prices, the gap between Washington and Tehran remains significant.

Elsewhere, Bitcoin rose for a third consecutive day following last week’s decline, while gold gained 0.8% to around $3,906 an ounce. In North America, Trump described a potential US-Canada trade agreement as very close after discussions with Canadian Prime Minister Mark Carney. Meanwhile, US Treasury markets are preparing for a possible major revision to government debt issuance guidance, while Japan’s Finance Minister Satsuki Katayama warned that authorities are ready to respond to disorderly currency movements.

In the technology sector, OpenAI CEO Sam Altman identified energy availability as one of the major challenges facing AI development. Fitch Ratings also warned that China's vehicle exports are helping offset weak domestic demand, although headwinds are expected to build towards 2027.

Markets are showing early signs of stabilisation, but the recovery remains fragile. Investors are balancing renewed interest in risk assets against uncertainty surrounding AI investment, global trade and central bank liquidity. Above all, developments in the Persian Gulf and the possibility of renewed US-Iran negotiations remain critical to the outlook for oil prices and broader market sentiment.

FISG Daily Market Wrap provides a concise view of the forces moving global markets, helping investors stay informed and better prepared for what comes next.

FISG — Interstellar Group