SynopsisAsian stocks advanced, recovering from recent losses as chip shares stabilized. Megacap technology earnings are anticipated this week, influencing market direction. Geopolitical tensions in the Middle East and trade concerns are creating investor caution. Elevated oil prices and escalating regional conflicts add to market uncertainty. Investors await corporate results and de-escalation for market rebounds.AgenciesAttention, however, remains firmly on the Middle East as US forces struck Iranian targets after President Donald Trump vowed Tehran “will pay” for killing three US soldiers.Asian equities advanced after three days of losses as a selloff in chip stocks eased ahead of megacap tech earnings this week. The MSCI Asia Pacific Index rose 0.5%, with the Nikkei 225 Stock Average climbing 1.5% as trading resumed after a holiday Monday. Stocks in South Korea erased earlier losses to edge 0.2% higher. Earlier, a gauge of chip stocks in the US rebounded from last week’s selloff.Elsewhere, the Canadian dollar held steady after the Trump administration vowed to impose a fresh 50% tariff on some of the country’s goods. The pound held its losses from the previous session as UK’s new prime minister Andy Burnham named former Defense Secretary John Healey to be his Chancellor of the Exchequer in a surprise move.Brent crude fell 0.3% to about $89 a barrel as traders watched for disruptions to Saudi Arabian exports after Houthi rebels threatened to blockade a key export route through the Red Sea. Worries that higher energy costs could boost inflation spurred bond losses in the last session.Elevated oil prices and escalating Middle East tensions are giving investors another reason for caution, adding to the rotation out of technology stocks after this year’s blistering rally. Focus is now shifting to megacap earnings later this week for clues on whether the AI-driven advance can be sustained.“The Iran situation continues to roil markets,” said veteran strategist Louis Navellier. “This is holding back the stock gains that should be expected given the strong earnings trends.”This week brings the first results from the US megacaps, and pressure is building for the companies to justify AI investments. Tesla Inc. and Alphabet Inc. kick off big tech’s reporting season Wednesday. Then, Microsoft Corp., Meta Platforms Inc., Apple Inc. and Amazon.com Inc. hit the following week.In geopolitical news, UK gilts declined after Burnham unnerved investors over his approach to the country’s finances. The selloff on Monday pushed yields on long-dated gilts to their highest since late May after Burnham said he will seek “any flexibility” while following the government’s borrowing and spending rules.Tariff concerns resurfaced after the Trump administration vowed to impose a fresh 50% levy on some Canadian goods, citing what it called unfair treatment of American alcohol, cars and dairy products, further inflaming trade tensions between the two neighbors.If Trump follows through with the levies, which are set to take effect in 30 days, the move would mark one of the most severe trade actions he’s taken against the US’s second-largest trading partner.Attention, however, remains firmly on the Middle East as US forces struck Iranian targets after President Donald Trump vowed Tehran “will pay” for killing three US soldiers. On Monday, the Iran-backed Houthis said they would impose a ban on maritime traffic from Saudi Arabia, threatening the Red Sea route that has allowed the kingdom to export millions of barrels of crude a day via its cross-country pipeline bypassing the Strait of Hormuz.Saudi Arabia said it would take all necessary measures to protect its ships following the threats by the Tehran-backed Houthi militants in Yemen.“For stocks to rebound, we need some solid earnings from the key tech names this week, and de-escalation in Iran wouldn’t hurt,” said Tom Essaye at The Sevens Report.Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. 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