Asian Stocks Rise as Softer US Jobs Data Eases Rate Fears, While Oil Prices Climb

Asian stock markets moved higher on Monday, following gains on Wall Street as weaker-than-expected U.S. employment data reduced expectations of an immediate increase in borrowing costs. However, uncertainty surrounding peace efforts in the Gulf pushed oil prices higher, keeping investors cautious about the outlook for inflation and global growth.

Japan’s Nikkei was among the strongest performers, rising about 2%, while South Korea’s benchmark gained around 0.8%. Chinese blue-chip stocks, however, edged lower by about 0.7% following weaker inflation data, highlighting concerns about the strength of economic activity in the world’s second-largest economy.

The gains across much of Asia came after Wall Street advanced at the end of last week. Investors responded positively to signs that the U.S. labour market may be losing momentum, reducing pressure on the Federal Reserve to raise interest rates in the near term.

Markets are now turning their attention to U.S. inflation data due later this week. A stronger-than-expected inflation reading could revive expectations of a September rate increase, while continued moderation in price pressures could strengthen the case for maintaining or eventually lowering borrowing costs. Futures markets were putting the probability of a September rate hike at roughly 45%, according to market pricing cited by Reuters.

Oil markets provided a contrasting signal. Brent crude rose about 0.6% to $84.04 a barrel, while U.S. crude gained around 0.5% to $78.56. Prices were supported by continued uncertainty around shipping through the Strait of Hormuz and the lack of a clear breakthrough in Gulf peace negotiations.

Iran has indicated that discussions with Oman could potentially lead to an agreement affecting shipping through the strategically important waterway, but Tehran has continued to attach conditions to reopening the passage. Any prolonged disruption could put further pressure on global energy supplies and increase concerns about inflation.

Elsewhere in financial markets, the U.S. dollar weakened broadly while gold remained relatively stable near $4,333 an ounce. Bond yields stayed slightly elevated as investors balanced expectations for interest rates against continuing geopolitical risks.

Strong corporate earnings have also supported investor sentiment, particularly in technology and artificial-intelligence-related companies. With markets awaiting the latest U.S. inflation figures, investors are likely to remain focused on signals from both central banks and developments in the Gulf as they assess the direction of global markets.