Daniel Mejia

Amazon shares remain under pressure, down 11% from their record high, as strong US labour market data, inflation concerns, and rising tensions between Israel and Iran reinforce expectations of tighter Federal Reserve policy.

The Nikkei 225 climbed 2.53% to a historic record high of 66,329, propelled by better-than-expected Japanese economic data. Surpassing market forecasts, strong gains in retail sales, industrial production, and consumer confidence highlighted the economy's underlying resilience.

Middle East tensions intensified as continued Israeli-Iranian attacks and a US threat of retaliation raised fears of a wider conflict, although oil prices fell. Meanwhile, US exports reached a record level on strong demand for petroleum products and capital goods, while Chinese exports and imports exceeded expectations, supporting local equities.

Gold fell below a key technical support level as rising expectations of a more hawkish Federal Reserve outweighed safe-haven demand arising from tensions in the Middle East. Higher implied odds of further rate increases added pressure to bullion, which closed at $4,282.

US stocks fell sharply as hotter inflation, energy-driven price pressures, and the escalating conflict in the Middle East increased fears of a prolonged hawkish stance from the Federal Reserve. The S&P 500, Nasdaq 100, and Dow all declined, while the VIX rose sharply. Meanwhile, a larger-than-expected draw in US crude inventories lifted oil prices, underscoring concerns over supply disruptions.

Japan’s Nikkei 225 retreated as producer prices surged to their highest level since March 2023, increasing pressure on the Bank of Japan amid yen weakness above ¥160 per dollar. Escalating tensions in the Middle East also weighed on market sentiment.

Geopolitical tensions and a blocked Strait of Hormuz drove crude oil prices higher, with Brent approaching the $95 mark. Concurrently, US equity indices hit record highs, propelled by a multi-year high in the manufacturing Purchasing Managers' Index (PMI) and stellar quarterly earnings from Hewlett Packard Enterprise.

The Dow Jones fell 1.21% to 50,692 as strong US employment and services data signalled economic resilience. Combined with a sharp drop in US crude inventories that pushed oil prices toward $97, rising inflation risks have lowered rate-cut expectations, driving fears of a more restrictive Federal Reserve stance later in 2026.

Ethereum rebounded by 8% to $1,693, but remained under pressure near the key $1,500 support level as tensions in the Middle East, supply disruptions, and inflation concerns weakened risk appetite. In addition, strong US payroll data reinforced expectations of higher-for-longer Federal Reserve policy, contributing to increased volatility.

Gross Domestic Product (GDP) measures the total value of a country's production of goods and services over a specified timeframe. Its analysis allows for the comprehensive evaluation of economic cycles and guides strategic investment decisions, although it possesses critical limitations by ignoring vital aspects of social development.