This content was published on
June 2, 2026 - 02:52
6 minutes
(Bloomberg) — Asian shares retreated from record highs as efforts to secure a US-Iran peace deal showed little progress and investors paused after a blistering AI-driven rally.MSCI’s regional equity index dropped 0.6%, with South Korea — a bellwether for artificial intelligence investments — swinging between gains and losses. Appetite in the tech sector remained weak with futures for the Nasdaq 100 Index sliding 0.6%, after the underlying gauge closed at an all-time high on Monday.Brent crude steadied around $95 a barrel as conflicting signals from the Middle East clouded prospects for a peace deal. Treasuries held Monday’s losses as the impasse in negotiations fueled concerns that higher energy costs will stoke inflation and push the Federal Reserve to raise interest rates. The yield on the benchmark 10-year Treasury stood at 4.46%.US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu offered differing accounts of a call about the fighting in Lebanon, as the US struggled to get efforts toward an Iran peace deal back on track. The mismatched statements were the latest example of confusing signals on progress to end the war, now in its fourth month.“The mismatch between what the US and Iran are saying is creating some unease in the market,” said Yugo Tsuboi, chief strategist at Daiwa Securities. Added to that, “the elevated sense of overheating became a factor prompting profit-taking.”Even as the AI-driven rally continues to propel equities to record highs, markets have been whipsawed by geopolitical headlines after an escalation in Middle East hostilities jeopardized peace talks. While investors still see a path to a US-Iran agreement, fragile conditions in the Strait of Hormuz have kept energy prices in focus as a key driver of the near-term outlook for inflation and rates.Trump has regularly claimed that negotiations were advancing and close to reaching a deal as the ceasefire that began in April remained fragile. Iran disputed reports last week that an interim accord was close and on Monday said it would act with its proxies, dubbed the “Axis of Resistance,” against Israel if fighting in Lebanon continued.“Expectations for a US-Iran agreement remain fluid,” said Jason Pride and Michael Reynolds at Glenmede. “Recent strikes and conflicting statements from both sides highlight that key details remain unresolved.”Still, the S&P 500 notched its eighth straight advance, its longest winning streak since May 2025, as the AI theme remained in focus.Alphabet Inc. unveiled plans to raise $80 billion through equity offerings, including an investment deal with Berkshire Hathaway Inc., highlighting the scale of spending tied to the race to build AI infrastructure.In late trading, Hewlett Packard Enterprise Co. shares soared 27% after the company gave an outlook for annual sales that topped estimates, citing massive growth in AI-fueled demand for its servers and networking.In Asia, the yen was steady after Japanese Finance Minister Satsuki Katayama said authorities are ready to take steps as needed in the foreign exchange market. The comments came days data showed that authorities conducted a record spate of currency intervention in the period between late April and late May.Elsewhere, the dollar strengthened on Monday after data showed US manufacturing activity in May expanded at the fastest pace in four years. The Institute for Supply Management’s report also indicated that input costs continued to rise sharply, with its prices-paid gauge hovering near levels last seen in 2022.Investors are now looking ahead to a fresh round of economic data, culminating in Friday’s May jobs report, for clues on the health of the US economy and the Fed’s policy path under new Chairman Kevin Warsh.“There is a creeping view that US growth could be re-accelerating as AI investment seeps through the broader economy,” Chris Turner, head of foreign-exchange strategy at ING Bank, wrote Monday. “This week’s data should further support the growing narrative that the Fed can be comfortable with its full employment mandate and can focus squarely on the upside risks to inflation.”Corporate Highlights:Software stocks rallied after Nvidia CEO Jensen Huang rebuffed concerns that the industry is at risk of being disrupted by more advanced AI tools. Anthropic PBC has confidentially submitted draft paperwork for a public listing, potentially leapfrogging longtime rival OpenAI in the race toward a Wall Street debut as soon as this fall. Some of the main moves in markets:StocksS&P 500 futures fell 0.4% as of 9:45 a.m. Tokyo time Hang Seng futures fell 0.1% Japan’s Topix fell 1.1% Australia’s S&P/ASX 200 fell 1% Euro Stoxx 50 futures rose 0.1% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1632 The Japanese yen was little changed at 159.70 per dollar The offshore yuan was little changed at 6.7643 per dollar The Australian dollar was little changed at $0.7161 CryptocurrenciesBitcoin fell 0.4% to $71,074.51 Ether fell 0.4% to $1,995.45 BondsThe yield on 10-year Treasuries was little changed at 4.46% Japan’s 10-year yield advanced one basis point to 2.690% Australia’s 10-year yield advanced one basis point to 4.90% CommoditiesWest Texas Intermediate crude was little changed Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.–With assistance from Toby Alder and Momoka Yokoyama.©2026 Bloomberg L.P.
