Global markets remain shaped by rising geopolitical tensions, as US President Donald Trump signaled a roughly one-month delay to a planned summit with China's Xi Jinping, citing the need to remain in Washington to manage the Iran conflict. Meanwhile, US and Chinese officials concluded trade talks in Paris, discussing the creation of a trade committee to stabilize relations, while Beijing urged the removal of unilateral tariffs and restrictions. Besides these developments, Middle East risks continue to escalate, with Trump warning that Iran's Kharg Island oil facilities could become a direct target and again calling on allies to support naval efforts in the Strait of Hormuz. European nations and major Asian economies seem to have rejected Trump's offer. Oil markets remain sensitive, with Brent holding above $100 for a third straight session, although US Treasury Secretary Bessent said prices could drop well below $80 in the coming months.
Legal filings indicate Jerome Powell may remain on the Federal Reserve Board beyond his chair term ending next May if investigations continue. At the same time, institutional views are shifting, with Citadel Securities abandoning its bearish stance on Treasuries and warning that slowdown risks are underpriced, while Morgan Stanley still expects a June rate cut. Goldman Sachs and peers remain supportive of US equities, though they warn that a prolonged conflict could trigger a severe Gulf downturn. Nvidia (NASDAQ:NVDA) expects its Blackwell and Rubin chips to generate at least $1 trillion in revenue by 2027 and unveiled new AI-focused products. Meta (NASDAQ:META) plans to invest up to $27 billion over five years to access AI infrastructure via Nebius.
In Asia, China authorities signaled stronger policy support, with Premier Li Qiang calling for coordinated measures to boost resilience. Regulators introduced a framework for rating wealth managers, while Shanghai cut the minimum down payment for commercial property purchases to 30%. Data showed FX holdings rising to ¥21.38 trillion at end-February alongside a solid settlement surplus. Alibaba plans to unify its AI operations under CEO Eddie Wu; Ant Group secured approval for its Yaocai Securities Finance acquisition. Supply disruptions tied to the Iran conflict are starting to impact activity, with Sinopec reportedly cutting refinery throughput by around 10% and tighter fertilizer export controls introduced to protect domestic supply.
Emerging markets are seeing renewed outflows, led by India and followed by China, while Hong Kong refinancing activity is becoming a key test for banking confidence. Australia is also facing rising energy risks despite being a major exporter, with officials warning that prolonged conflict could disrupt fuel supply. The RBA raised rates by 25 bp to 4.10%, with further tightening likely as inflation persists, while Canberra has ruled out sending naval forces to Hormuz despite US requests.
The S&P 500 has shown a modest recovery compared to the past five weeks, but remains under pressure overall. The AUD is attempting to stabilize following the rate hike, although ongoing geopolitical uncertainty continues to weigh on the currency. Potential developments in the Strait of Hormuz, along with Israel's continued war stance, are providing ongoing support to oil, copper, and gold prices.