Financial Daily: Trump announces blockade of the Strait of Hormuz; international oil prices surge over 9%! KOSPI drops nearly 9%

- Key Focus

– US President Trump announces a naval blockade of the Strait of Hormuz, sharply escalating US-Iran geopolitical tensions

– Fed Governor Waller sent a hawkish signal, as markets await this week’s inflation data and Fed officials’ speeches

– South Korea's KOSPI index closed down nearly 9%; SK Hynix's Q2 earnings forecast fell short of market expectations, and its stock plunged over 15%

Content compiled by 'Harbor Family Office,' a subsidiary of Henry Jia Group. It does not constitute any investment or trading advice. Stay tuned.

- Stock Market

[U.S. Markets] Renewed energy supply concerns over the Strait of Hormuz dragged all three major U.S. equity indices lower

Geopolitical tensions between the U.S. and Iran escalated further on Monday. Trump proposed a naval blockade of the Strait of Hormuz and plans to impose a 20% fee on cargo passing through the strait. The news triggered sharp market concerns over potential energy supply disruptions. Surging oil prices intensified fears of higher inflation and interest rate hikes, prompting significant capital outflows from tech and semiconductor sectors. All three major U.S. indices came under pressure, with the Nasdaq posting notable losses and market panic sentiment markedly rising.

At the close, the S&P 500 fell 0.79% to 7,515.34; the Nasdaq declined 1.55% to 25,873.176; the Dow Jones Industrial Average dropped 0.26% to 52,498.64. The VIX fear index rose 14.11% to 17.15. The Philadelphia Semiconductor Index slid 4.78% to 12,347.784.

The Magnificent Seven U.S. tech stocks index fell 0.96%. Microsoft gained 1.53%, Amazon rose 0.80%, and Apple advanced 0.63%. Alphabet A shares dropped 1.31%, Meta fell 1.86%, Tesla slid 3.19%, and NVIDIA declined 3.52%. The Nasdaq Golden Dragon China Index edged down 0.14% to 6,112.45. Among prominent Chinese ADRs, Baidu fell 3.52%, Tencent dropped 2.19%, and Alibaba inched up 0.02%. Circle shares declined 4.77%.

[European Markets] Pan-European indices were largely flat, supported by strong gains in energy stocks

Major European indices closed roughly flat on Monday, as heightened geopolitical risks boosted energy stocks significantly, offsetting losses in semiconductor and tech sectors. At the close, the pan-European STOXX 600 index dipped 0.01% to 641.01, while the EURO STOXX 50 edged up 0.02% to 6,271.02.

Germany's DAX 30 rose 0.19% to 25,114.25; France's CAC 40 gained 0.31% to 8,364.65; the UK's FTSE 100 was nearly flat at 10,498.29; Italy's FTSE MIB climbed 0.37% to 52,809.35.

[Asian Markets] Japanese and South Korean equities declined sharply, with South Korea’s benchmark index falling nearly 9%

Asian equities came under broad pressure on Monday as geopolitical tensions escalated sharply. Japanese and South Korean markets plunged suddenly during the session, with the KOSPI index in Korea plummeting again after a rebound in the previous session, triggering a circuit breaker intraday. By the close, the Nikkei 225 fell 1.92% to 67,242.73 points; the KOSPI slumped 8.95% to 6,806.93 points, with SK Hynix shares plunging 15.4%, marking their steepest drop on record. The FTSE Straits Times Index in Singapore edged up 0.02% to 5,470.34 points, while Thailand’s SET Index gained 0.39% to 1,627.90 points.

[Hong Kong Market] Hong Kong’s three major indices ended mixed, with semiconductor stocks weighing on the Hang Seng Tech Index

On Monday, Hong Kong’s three major indices closed mixed, following an intraday pattern of rising early then retreating. Selling pressure intensified in the afternoon, widening losses in the Hang Seng Tech Index, although the Hang Seng Index recouped its losses and turned positive near the close. At the close, the Hang Seng Index rose 0.16% to 24,213.72 points; the Hang Seng Tech Index dropped 0.96% to 4,676.43 points; and the Hang Seng China Enterprises Index gained 0.33% to 8,065.97 points.

By sector, defensive plays such as oil and banking outperformed. Yanchang Petroleum International rose 3.70%, China Oilfield Services climbed 2.93%, and PetroChina advanced 2.44%. In banking, Gansu Bank surged 4.51%, ICBC gained 2.55%, and Bank of China (Hong Kong) rose 2.43%. Conversely, tech manufacturing subsectors broadly weakened, with memory chips, PCBs, and optical communications suffering from cooling industry sentiment and stock-specific funding pressures, leading to overall soft performance. Internet stocks were mixed: Alibaba rose 0.45%, Tencent declined 0.56%, Xiaomi Group closed flat, and Meituan fell 0.95%. Among AI large-model概念股, Zhipu AI reversed earlier gains to finish near flat, while MINIMAX tumbled over 17%. The semiconductor sector saw significant corrections, with Huahong Semiconductor down more than 7% and SMIC falling 1.63%.

[A-Share Market] China’s three main stock indexes all declined, with the Shanghai Composite once again falling below the 4,000-point mark

On Monday, China’s A-share market opened lower and extended losses throughout the day, closing weak across the board. At the close, the Shanghai Composite dropped 2.06% to 3,913.79 points; the Shenzhen Component Index fell 3.48% to 14,522.85 points; and the ChiNext Index declined 3.10% to 3,723.52 points. Across sectors and themes, broad-based losses dominated, with only a few defensive sectors advancing against the trend. Traditional Chinese medicine led gains, with Longshen Rongfa surging 20% to hit the daily limit and Tianmu Pharma also reaching its upper trading limit. Banking stocks rallied modestly, with Suzhou Bank rising over 6%. The oil & gas sector was active, boosted by a sharp rise in international crude prices. On the downside, memory chip-related stocks plunged collectively—GigaDevice, Demingli, and Shannon Core Innovation all hit their daily trading limits on the downside. Optical fiber stocks were heavily sold off, with Hengtong Optic-Electric, Changying Tongxin, FiberHome, and Tevia Information all hitting跌停. The computing power hardware supply chain underwent a broad correction, led by declines in PCBs, super-hard materials, and CPO-related segments.

- Bonds

[U.S. Treasuries] Safe-haven demand pushed U.S. Treasury yields higher, with the 10-year yield rising more than 5 basis points

On Monday, U.S. Treasury yields rose across the curve as escalating geopolitical risks, soaring oil prices, and hawkish Federal Reserve commentary jointly heightened market concerns about inflation, driving yields upward. At the New York close, the 10-year Treasury yield climbed 5.23 basis points to 4.6136%, remaining on an upward trajectory throughout the session; the 2-year yield rose 5.67 basis points to 4.2647%; and the 30-year yield increased 4.02 basis points to 5.0990%.

[Non-US Bond Market] Yields on government bonds in major European countries generally rose

Yields on major European sovereign bonds generally followed U.S. Treasuries higher. Germany’s 10-year Bund yield rose 4.3 basis points to 3.109%, and its 2-year yield jumped 7.5 basis points to 2.722%. The UK’s 10-year gilt yield climbed 10.7 basis points to 4.979%, while its 2-year yield surged 13.4 basis points to 4.355%. France’s 10-year OAT yield rose 5.9 basis points to 3.888%, and Italy’s 10-year BTP yield also increased by 5.9 basis points to 3.568%.

[China Bond Market] Treasury futures broadly weakened

Treasury futures weakened broadly on Monday. As of the close, the front-month 30-year Treasury contract fell 0.30%, the 10-year contract dropped 0.05%, the 5-year contract declined 0.02%, and the 2-year contract slipped 0.01%.

– Foreign exchange

[USD] Safe-haven demand boosted the dollar, pushing the ICE U.S. Dollar Index above the 101 mark.

The dollar initially dipped but rebounded on Monday, as escalating geopolitical risks and a sharp surge in oil prices triggered safe-haven inflows into the greenback, helping the DXY recover intraday losses and turn higher. At the New York close, the ICE U.S. Dollar Index rose 0.33% to 101.274, showing a V-shaped intraday pattern; the Bloomberg Dollar Spot Index gained 0.27% to 1,222.30.

The dollar strengthened broadly against major global currencies. USD/JPY rose 0.47% to 162.48 yen. EUR/USD fell 0.28% to $1.1381; GBP/USD declined 0.44% to $1.3346; AUD/USD dropped 0.49% to $0.6916.

[CNY] USD/CNH traded at 6.7851.

At the New York close, USD/CNH was up 31 pips from Friday’s close, trading at 6.7851. Onshore CNY closed officially at 6.7817 against the dollar, down 33 pips from the previous trading day's official fix.

[Digital Assets] Heightened risk-off sentiment led both Bitcoin and Ethereum lower.

Digital asset markets weakened broadly on Monday under risk-off sentiment, as capital outflows from risk assets weighed on cryptocurrency prices. Bitcoin fell approximately 3.04% to $62,208.11; Ethereum declined about 2.78% to $1,769.52.

– Products

[Energy] Escalating tensions in the Middle East sent U.S. crude oil futures soaring more than 9%.

International oil prices surged sharply on Monday, driven by news that former President Trump announced a naval blockade of the Strait of Hormuz. U.S. Central Command confirmed it would initiate maritime enforcement actions against Iran on Tuesday afternoon Eastern Time, sharply heightening fears of energy supply disruptions.

At the close of New York trading, WTI August crude oil futures surged $6.73, or 9.42%, settling at $78.14 per barrel; Brent September crude oil futures jumped $7.29, or 9.59%, settling at $83.30 per barrel.

[Precious Metals] The precious metals market weakened overall, with gold prices falling below the $4,000 mark.

Precious Metals:Gold prices declined sharply under dual pressure from a stronger U.S. dollar and concerns over potential interest rate hikes triggered by soaring oil prices. At the close of New York trading, spot gold fell approximately 2.93% to $3,999.06 per ounce, slipping below the $4,000 threshold; COMEX gold futures dropped 2.60% to $4,006.90 per ounce.

Metals Futures Market:Spot silver fell 3.77% to $57.6062 per ounce; COMEX silver futures declined 3.81% to $57.910 per ounce; COMEX copper futures dropped about 0.2% to $6.2740 per pound; spot platinum fell approximately 1.95%, and spot palladium declined about 2%.

[Disclaimer]

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