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August 3, 2026 - 03:29
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(Bloomberg) — Oil fell and Treasuries rose after President Donald Trump said fresh US-Iran talks would begin Monday, boosting optimism the two sides may reach a deal to reopen the Strait of Hormuz. Asian stocks fell as South Korean chipmakers tumbled.The yen was the standout focus in early Asian trade, strengthening further following its intervention-led gains late last week. The currency advanced as much as 1.4% to 155.23 per dollar with traders remaining on alert for further coordinated intervention to support the currency.“For a week probably, we can see more choppiness and probably more temporary yen strengthening,” said Julia Wang, North Asia chief investment officer at Nomura International. “But we do think this does not change the actual direction for dollar-yen and probably will continue higher once the intervention is behind us.”Brent for October slid as much as 7.3% to $81.55 a barrel after Trump said he’d agreed to call off a massive attack on Iran as allies in the Middle East, including Saudi Arabia, asked him to pursue a deal instead. Oil was also weighed by another small increase by major OPEC+ nations to their production quotas.Treasuries rose across the curve as oil’s decline eased inflation concerns. The benchmark 10-year yield dropped four basis points to 4.70%, after rising to the highest since January 2025 last week. The dollar weakened against most of its Group-of-10 peers.Monday’s market gyrations came after days of escalating tensions that saw the US threaten to hit the Islamic Republic “very hard” in a bid to end a conflict now in its sixth month. A supply squeeze triggered by the war drove up fuel costs, stoking fears of another inflation spike and unsettling investors. Focus is also returning to the artificial intelligence theme after a week of violent swings culminated in a sharp rebound for chip stocks after a rout in chip stocks earlier.A regional gauge of chip stocks fell 0.4% on Monday as Samsung Electronics Co. and SK Hynix Inc. both tumbled more than 7%, offsetting gains in Japanese semiconductor companies such as Renesas Electronics Corp. and Kioxia Holdings Corp.On Friday, China’s DeepSeek rolled out a public beta application programming interface, or API, for its flagship artificial intelligence model, V4 Flash, touting advancements in agentic abilities.South Korea’s Kospi Index, a bellwether for AI investments, fell more than 4%, after surging a record 18% on Friday. With the Nikkei 225 Stock Average also slipping over 2%, the broader MSCI gauge of Asian shares fell 0.9%.Sentiment stabilized with futures contracts for the Nasdaq 100 Index rising 0.8%.Trump suggested a deal on reopening the Strait of Hormuz may be close, and said he would also continue to pursue a path to end Iran’s nuclear program.Iranian Foreign Minister Abbas Araghchi said earlier Sunday that negotiations between Iran and Oman are in the final stages. The two countries that flank the strait are discussing a new route through it, but the talks don’t cover whether the strait will be closed or open, Araghchi spokesman Esmail Baghaei said in an interview on Iranian state-run TV.“It would have been the biggest attack since World War II,” Trump said Sunday to reporters on Air Force One. “We’re just going to see whether or not we can make a deal.”Markets remain on high alert for more joint intervention by Japan and the US on Monday after coordinated operations in Tokyo and New York last week triggered a dramatic rebound in the currency.Japan’s Ministry of Finance said it conducted a yen-buying operation on July 31, US time, in coordination with the US Department of Treasury and wouldn’t hesitate conducting further joint intervention. Trump told reporters on Sunday that the move was “a signal of friendship.”Treasury Secretary Scott Bessent said that the US stepped in to help fight “disorderly” movements in the yen and is ready to keep helping Japan.“History is clear, joint FX intervention packs a punch, and investors should lean with the official flow, not against it,” Elias Haddad, global head of markets strategy at Brown Brothers Harriman, wrote in a note to clients. “Since 1998, all three coordinated US FX intervention episodes were successful.”Some of the main moves in markets:StocksS&P 500 futures rose 0.5% as of 10:27 a.m. Tokyo time Nikkei 225 futures (OSE) fell 1.2% Japan’s Topix fell 2.7% Australia’s S&P/ASX 200 fell 0.2% Hong Kong’s Hang Seng rose 0.4% The Shanghai Composite fell 0.5% Euro Stoxx 50 futures rose 0.6% CurrenciesThe Bloomberg Dollar Spot Index fell 0.3% The euro was little changed at $1.1535 The Japanese yen rose 0.7% to 156.23 per dollar The offshore yuan was little changed at 6.7521 per dollar CryptocurrenciesBitcoin fell 0.6% to $63,048.22 Ether fell 0.8% to $1,867.6 BondsThe yield on 10-year Treasuries declined four basis points to 4.70% Japan’s 10-year yield advanced 2.5 basis points to 2.815% Australia’s 10-year yield was little changed at 4.93% CommoditiesWest Texas Intermediate crude fell 5% to $80.45 a barrel Spot gold rose 0.2% to $4,053.88 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Matthew Burgess and Elaine Lai.©2026 Bloomberg L.P.
