Asian markets opened slightly higher on Monday as investors assessed the latest military exchanges between the United States and Iran, while preparing for a packed week of corporate earnings that could set the tone for global equities.
Japan's Nikkei 225 rose 0.58%, South Korea's Kospi added 0.02%, and Australia's ASX 200 gained 0.10%.
Investors remained focused on developments in the Middle East after the U.S. and Iran exchanged fresh missile and drone strikes over the weekend, heightening concerns about the security of energy supplies and shipping routes.
Iran targeted U.S. facilities across several Gulf countries and declared the Strait of Hormuz closed. President Donald Trump, however, rejected that claim on Sunday, saying commercial traffic was continuing through the strategic waterway. The latest escalation followed U.S. airstrikes ordered by Trump on Saturday in response to an Iranian attack on a commercial vessel transiting the strait.
The exchanges continued into Sunday, when U.S. Central Command confirmed additional strikes on Iranian targets. The military said the operation was intended to reduce Iran's ability to launch attacks against commercial ships and civilian vessels using the Strait of Hormuz.
Oil prices climbed as traders assessed the risk of disruptions to global crude supplies. Brent crude advanced more than 3% to around $78.50 a barrel, reflecting renewed concerns over the stability of one of the world's most important energy corridors.
The geopolitical tensions also weighed on bond markets. Yields on U.S. Treasuries moved higher across the curve, with the benchmark 10-year yield rising to about 4.58%. Government bonds in Australia and Japan also came under pressure, while the U.S. dollar strengthened against all other Group-of-10 currencies.
U.S. equity futures pointed to a weaker opening. Futures tied to the Dow Jones Industrial Average fell 135 points, while S&P 500 futures declined 0.3%. Nasdaq-100 futures lost 0.5% as investors adopted a cautious stance ahead of the cash session.
Markets are expected to remain sensitive to developments in the Middle East and the upcoming earnings season, with investors assessing whether geopolitical risks will outweigh corporate performance in driving sentiment this week.
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