Nikkei +3%, Kospi +4.1% as Oil Slips on Hormuz Hopes
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- Asian stock markets jumped on Aug 5, with Japan's Nikkei climbing 3.0% and South Korea's Kospi adding 4.1% in continued wild swings, as Wall Street hit record highs on robust tech earnings.
- MSCI's broadest index of Asia-Pacific shares outside Japan rose 2.4%, while Chinese blue chips gained 0.7%.
- Oil prices fell sharply, with Brent crude down 1.4% to $78.27/barrel and U.S. crude dropping 1.7% to $74.50 — well below July's $102 peak — after Qatar reported mediator progress on ending the U.S.-Iran war.
- Hormuz shipping traffic recovered to 40-45% of pre-war levels last week; CBA estimates flows only need to hit 50-60% to trigger oversupply conditions in global oil markets.
- AMD fell 8.8% after hours despite beating earnings, as investors deemed results short of "sky-high expectations" for AI-exposed names.
- SpaceX dropped 7.5% after hours on worries capex was eating up all its cash flow; Pepperstone's Chris Weston warned additional capital "will almost certainly be required" over the medium to longer term.
- Bonds rallied as 10-year Treasury yields fell to 4.603% from 4.747% last week, and markets pared September Fed rate hike probability to 57% from 67%; gold rose 1.3% to $4,130/ounce.
Why it matters: The 24% oil price drop from July's $102 high to $74.50 has immediate inflation and Fed policy implications, with markets already cutting September rate-hike odds by 10 percentage points. The simultaneous after-hours selloff in AMD and SpaceX — both reporting beats — shows AI investors are now demanding returns on massive capex, not just growth promises, raising the bar for the entire AI-linked complex.
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