Nikkei Breaks 60,000 Barrier as AI Optimism Clashes with Middle East Tensions

Asian markets exhibited a stark divide on Monday, with Japan's Nikkei 225 making history by closing above the 60,000 mark for the first time. The index climbed 1.38% to 60,537.36, fueled by a surge in artificial intelligence and semiconductor stocks following a strong earnings report from Intel. Automation firms Keyence and Fanuc both saw gains of approximately 16% on better-than-expected results. The rally extended to Seoul, where the Kospi surged 2.15% to 6,615.03, supported by robust corporate earnings from industry giants Samsung Electronics and SK Hynix. In China, the Shanghai Composite edged up 0.16% to 4,086.34, buoyed by data indicating that industrial profits grew at their fastest pace in six months. Offsetting the equity gains were escalating risks in the Strait of Hormuz. Brent crude futures jumped nearly 3% to exceed $108 per barrel after the U.S. suspended negotiations with Iran. Gold also trended higher, trading at $4,713 an ounce as investors sought safety ahead of critical central bank meetings. Not all regional markets shared the optimism. The Hang Seng dipped 0.20% as traders awaited mid-May talks between Presidents Trump and Xi. Meanwhile, Australia's S&P/ASX 200 fell 0.23% to 8,766.40, marking its fifth straight session of losses, weighed down by a 5% drop in Origin Energy following a downgraded earnings outlook. Market attention now shifts to the U.S., where Federal Reserve Chair Jerome Powell is scheduled to hold his final press conference this Wednesday. Investors are weighing the potential for resumed rate cuts against the backdrop of persistent geopolitical volatility.