Gotrade News - Middle East tensions are again pressuring global oil shipping through the Strait of Hormuz and shaking Asian market sentiment on Monday (4/5). Investors are tracking a fresh US military operation aimed at securing commercial shipping lanes across the Gulf.
The MSCI Asia-Pacific index excluding Japan rose 0.6%, while South Korea's KOSPI jumped 2.6% on its return from holiday. Brent crude steadied at $108.30 per barrel after dropping more than 2% earlier in the session.
Key Takeaways
- The US launched Project Freedom to escort commercial ships through the Strait of Hormuz starting Monday (4/5).
- Brent crude held near $108.30 per barrel, supporting energy stocks such as Exxon Mobil (XOM) and Chevron (CVX).
- National Australia Bank flagged Middle East conflict as a key downside risk to asset quality after a first-half profit miss.
President Donald Trump announced Project Freedom to guide foreign ships across the Strait of Hormuz. US Central Command is deploying guided-missile destroyers, more than 100 aircraft, and 15,000 service members for the operation.
Trump warned that the US military will use force if Iran tries to disrupt the operation. Iran reportedly submitted a 14-point proposal, though Trump indicated Washington is unlikely to accept the terms.
Energy Markets and Related Stocks
The Strait of Hormuz carried more than a quarter of global seaborne oil trade in 2024. Any disruption along this corridor risks pushing oil prices sharply higher and squeezing Asian manufacturers that rely on energy imports.
Major energy plays such as the SPDR Energy ETF (XLE) are back in focus among traders. Oil-linked instruments like the United States Oil Fund (USO) remain popular hedges when geopolitical risk climbs.
Goldman Sachs noted that corporate guidance and analyst estimates have stayed strong this quarter. The bank pointed to S&P 500 EPS growth of 25%, or 16% excluding one-off gains, as evidence of resilient earnings momentum.
Risk Signals From Australia
National Australia Bank reported first-half cash earnings of A$2.64 billion, well below the A$2.93 billion estimate. Management cited the Middle East conflict as a key source of downside risk to future asset quality.
The bank booked an A$706 million credit impairment charge and an A$1.35 billion pre-tax software capitalization adjustment. Net interest margin edged up 3 basis points to 1.81% on stronger business lending volumes.
US futures traded flat ahead of the open, with S&P 500 and Nasdaq contracts barely moving. More than 100 earnings reports are due this week, including AMD, Palantir, Disney, and McDonald's.
US Treasury yields and the dollar held steady, while gold slipped 0.2% to $4,603 per ounce. Markets are now waiting for Friday's US jobs report, with consensus calling for 60,000 new payrolls.
Energy investors should track Project Freedom developments closely over the coming days. Any escalation around the Strait of Hormuz could push crude prices through the psychological $110 per barrel level quickly.
Sources
Investing.com, Stocks edge up in Asia, oil flat amid Middle East uncertainty, 2026.
Investing.com, National Australia Bank posts first-half profit miss, warns of Middle East conflict risks, 2026.
Axios, Trump says U.S. Navy will escort ships out of the Strait of Hormuz from Monday, 2026.
