Asian Markets Slide as Investors Weigh Iran Sanctions, Trade Tensions and Nvidia Results

By COMFORT OGBONNA

Asian share markets moved lower on Monday while oil prices eased as investors waited for details of new U.S. sanctions against Iran and assessed growing trade tensions between the United States and Canada.

The cautious mood also reflected heightened uncertainty ahead of Nvidia’s quarterly results on Wednesday, with investors increasingly concerned about whether the leading artificial-intelligence chipmaker can meet the extremely high expectations already built into its share price.

Nvidia has become one of the most closely watched companies in global markets because of its dominant role in supplying chips used to develop and operate artificial-intelligence systems. Its results are expected to provide another indication of whether the enormous investment in AI infrastructure is translating into sustained corporate earnings growth.

Analysts expect the company’s quarterly revenue to nearly double to about $92 billion, while full-year earnings expectations are centered around $103 billion to $105 billion.

The scale of those expectations leaves little room for disappointment. Any indication that demand for AI-related chips is slowing, or that customers are becoming more cautious about their spending, could put additional pressure on technology shares that have already reached elevated valuations.

Investors are also awaiting comments from Federal Reserve Chair Kevin Warsh, who is scheduled to speak Friday at the annual central banking conference in Jackson Hole, Wyoming.

Markets are hoping Warsh will provide clues about the future direction of U.S. interest rates, although expectations for a major policy signal remain limited because Federal Reserve officials have historically avoided using the Jackson Hole gathering to announce or preempt major policy decisions.

Economists expect Warsh to focus instead on broader changes in the central bank’s approach, including its balance sheet and the role of long-term interest rates in the U.S. economy.

Markets currently reflect roughly a 40% probability of a Federal Reserve rate increase at the September meeting, while a rate move by December is fully priced into expectations.

Those expectations could shift depending on inflation data due later in the week. Economists expect core inflation to remain around 3.3% in July, a level that would continue to indicate persistent price pressures despite the broader cooling in some areas of the economy.

Warsh is also likely to face questions about the U.S. Treasury’s decision to significantly increase its purchases of longer-dated government bonds.

The Treasury has been attempting to prevent a sharp rise in long-term borrowing costs, which can affect mortgage rates, corporate financing and the valuation of stocks.

The effort has so far produced limited results. The yield on 30-year U.S. Treasury bonds remained around 5.25%, close to a recent 19-year high of about 5.34%.

Higher bond yields can make government debt more attractive relative to stocks while also reducing the present value investors assign to future corporate earnings. That dynamic is particularly important for technology companies whose valuations depend heavily on expectations for strong earnings growth years into the future.

Oil prices also weakened ahead of Washington’s expected announcement on additional sanctions against Iran.

Brent crude fell about 1.4% to $93.07 a barrel, while U.S. crude declined 1.6% to $85.64. The losses followed a strong week for oil, when Brent gained about 6.6% amid concerns that tensions involving Iran could disrupt supplies from the Middle East.

Markets remain focused on the Strait of Hormuz, a critical shipping route for global energy supplies. Any significant disruption could rapidly tighten oil markets and push prices higher.

U.S. Treasury Secretary Scott Bessent was expected to outline the new sanctions later Monday. Investors are watching closely to see how broadly the measures will be applied and whether they could affect countries and companies that continue trading with Iran.

The sanctions could have wider consequences for global markets if they reduce Iranian oil exports or increase tensions in a region already facing significant geopolitical uncertainty.

Asian equities were broadly lower.

Japan’s Nikkei index fell 0.5%, adding to a decline of nearly 4% over the previous week. South Korea’s technology-heavy market dropped 2.8%, while Taiwan’s benchmark declined 0.5%.

An index tracking major Asia-Pacific shares outside Japan fell 1.3%, while China’s blue-chip index declined 1.2%.

Some of the steepest losses were recorded by major technology companies.

Shares of Alibaba listed in Hong Kong dropped 9.5% after the Chinese e-commerce and cloud-computing company announced plans for a roughly $10.2 billion share offering. Investors questioned whether the company’s heavy spending on artificial intelligence will generate sufficient returns.

Samsung Electronics also fell more than 8% after announcing a record shareholder-return program worth about $79 billion. The size of the program disappointed some investors who had expected shareholders to receive a larger portion of the company’s expected gains from the AI boom.

The weakness in Asian markets carried into expectations for European and U.S. trading. Futures linked to the Euro Stoxx 50 and Germany’s DAX were down about 0.1%, while futures for Britain’s FTSE 100 were little changed.

In the United States, futures for the S&P 500 declined 0.1%, while Nasdaq futures fell 0.4%, reflecting the nervousness surrounding technology valuations ahead of Nvidia’s earnings announcement.

Currency markets were also affected by trade tensions.

The U.S. dollar rose 0.2% against the Canadian dollar to around 1.3790 Canadian dollars per U.S. dollar after Canadian Prime Minister Mark Carney said Ottawa would respond to U.S. tariffs with measures of its own following the breakdown of trade negotiations.

Canada plans to impose tariffs on a range of U.S. products, including steel, dairy products, appliances, agricultural equipment, pulp and paper and electronics.

The Canadian measures add another layer of uncertainty to the global trading environment at a time when investors are already concerned about the economic consequences of escalating tariff disputes.

Elsewhere, the U.S. dollar remained under pressure after losing about 0.8% against a basket of major currencies the previous week.

The euro held around $1.1680 after gaining 0.9% last week, while the dollar was little changed against the Japanese yen at about 158.92 yen.

The dollar’s broader decline has been linked to concerns over rising U.S. government debt and uncertainty surrounding economic and trade policy. Some investors have increasingly turned toward assets considered more resistant to currency depreciation, particularly gold.

Gold prices rose another 0.8% to about $4,653 an ounce, extending a powerful monthly rally. The metal has gained roughly 15% so far in August and is on course for its strongest monthly increase on record if the gains are maintained through the end of the month.

The combination of geopolitical tensions, trade disputes, uncertainty over monetary policy and concerns about government debt has therefore left investors facing several competing risks at the start of the week.

Markets will now look for direction from developments in Washington, particularly the details of the new Iran sanctions, upcoming U.S. inflation data, Warsh’s comments on monetary policy and the highly anticipated Nvidia results.

Together, those events could determine whether the recent weakness in stocks and the dollar deepens or whether investors regain confidence in riskier assets.