U.S.-Iran Easing, Oil Rebounds Sharply, Treasury Yields Hit New Highs

Market Overview

Markets swung between geopolitical relief and rising macro pressure on Friday after President Donald Trump delayed potential military action against Iran, triggering a sharp V-shaped reversal in crude oil prices. Meanwhile, memory chip stocks sold off aggressively amid mounting supply concerns, while U.S. Treasury yields surged to fresh one-year highs. Asian equities traded broadly lower, led by weakness in technology shares as risk-off sentiment continued to dominate global markets.

■ U.S.-Iran Tensions Ease, Oil Stages V-Shaped Reversal

Crude prices reversed sharply higher after Trump announced a delay in potential military action against Iran. WTI crude erased intraday losses and closed more than 3% higher, while Brent crude surged 3.6% to settle at $109.46 per barrel.

Iran reportedly submitted a 14-point negotiation proposal through Pakistan, though Washington rejected the terms while keeping military options on the table. At the same time, Tehran established a Strait of Hormuz administrative authority and signaled plans to impose “management fees” on undersea communication cables, keeping geopolitical risk premiums elevated despite temporary diplomatic easing.

■ Memory Chip Stocks Slide as Supply Concerns Intensify

Storage and memory-related semiconductor names came under heavy pressure, with Seagate Technology falling nearly 7% and Micron Technology dropping close to 6%. Investor concerns intensified after executive commentary fueled fears of insufficient production capacity across the memory supply chain.

Meanwhile, Samsung Electronics faces an escalating labor dispute, with an 18-day strike countdown triggering panic buying among customers and driving memory prices higher. Although a Korean court ordered that the strike must not disrupt production output, investors remain concerned about potential downstream packaging and backend supply-chain disruptions.

■ U.S. 10Y Yield Climbs to 4.62%, Japan 30Y Bond Breaks Above 5%

The U.S. 10-year Treasury yield surged to an intraday high of 4.62%, marking its highest level in a year. Markets are increasingly pricing in persistent inflation risks, expanding fiscal deficits, and a potential shift in Federal Reserve policy expectations.

Japanese government bonds also experienced intense selling pressure. Japans 10-year yield climbed to 2.8%, while the 30-year yield surged above 5%, signaling deepening stress across global sovereign debt markets.

Data also showed that overseas investors incurred approximately $142.1 billion in unrealized losses on long-term U.S. Treasury holdings in March. Japan reduced its Treasury holdings by $47.7 billion, while China cut holdings by $41 billion, pushing Chinese ownership to its lowest level since 2008.

■ Chinas April Retail Sales Miss Expectations

Chinas April retail sales rose just 0.2% year-over-year, sharply below the cumulative 1.9% growth recorded during the January-April period. Auto sales plunged 15.3% during the month, highlighting continued weakness in domestic demand.

Property-sector data also remained fragile. Real estate development investment fell 13.7% year-over-year during the first four months of the year, while new home sales value declined 14.6%.

One bright spot came from Baidu, whose Q1 revenue slightly declined year-over-year but still exceeded expectations. Notably, the companys AI-related businesses surpassed 50% of total revenue contribution for the first time, reaching RMB 13.6 billion and growing 49% annually.

Key Themes Ahead● Putins Visit to China

Vladimir Putin will conduct a state visit to China from May 19-20, marking his 25th trip to the country. Markets will closely monitor potential developments related to energy cooperation, defense ties, cross-border payment systems, and coordination within the Shanghai Cooperation Organization. The visit could influence the ruble, the yuan, and broader geopolitical dynamics.

● Nvidia Earnings Night

NVIDIA is set to report quarterly earnings this Wednesday, with options markets reflecting extremely bullish positioning ahead of the release. Investors remain highly focused on July guidance and AI infrastructure demand trends.

The earnings release also coincides with Google I/O and AMD AI Developer Day 2026, making this a potentially pivotal week for the broader technology sector and AI-related market leadership.

Focus Today (GMR+8)

• May 19-20: Vladimir Putin state visit to China

• Japan Q1 Real GDP data release

• Wednesday: NVIDIA earnings report, with extremely bullish options positioning

• Google I/O 2026 Developer Conference

• AMD AI Developer Day 2026

• SpaceX Starship V3 maiden flight