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May 28, 2026 · Morning edition
Overnight, Brent crude oil prices rose over 3% to trade around $97-98 per barrel after the U.S. military conducted defensive airstrikes against Iranian military sites near the Strait of Hormuz. This escalation follows conflicting signals regarding potential peace negotiations between the US and Iran, fueling concerns about ongoing disruptions to global energy supplies. The geopolitical developments contributed to a general decline across most Asian equity markets, with Hong Kong's Hang Seng index notably shedding 1.9% and South Korea's Kospi down 1.2%, as investors seek clarity amidst the uncertainty.
Oil prices rose sharply and Asian equities weakened Thursday as renewed U.S.-Iran tensions put energy security and inflation risks back at the center of global markets.
Brent crude climbed more than 3% overnight to trade around $97 to $98 a barrel after the U.S. military conducted defensive airstrikes against Iranian military sites near the Strait of Hormuz. The escalation followed conflicting signals over possible peace negotiations between Washington and Tehran, heightening concern that global energy supplies could face further disruption.
The move in crude fed into a broader risk-off tone across Asia. Most regional equity markets declined, with Hong Kong’s Hang Seng index down 1.9% and South Korea’s Kospi lower by 1.2%, as investors waited for greater clarity on the geopolitical outlook and its implications for energy costs.
Central bank officials also underscored the inflationary risks tied to the latest shock. European Central Bank Chief Economist Philip Lane told a Bank of Japan conference that “second-round effects” from the energy shock linked to the Middle East conflict would persist even if the initial impact eased, keeping inflation elevated. Separately, Chicago Federal Reserve President Austan Goolsbee warned that enthusiasm around artificial intelligence, combined with oil price shocks, could intensify inflationary pressure and potentially require the Fed to raise interest rates.
Those remarks highlighted the increasingly divergent policy landscape facing major central banks. The ECB is seen as moving toward further rate increases, while the Fed remains more cautious as it weighs incoming data, inflation dynamics and the broader economic impact of higher energy prices.
Markets will get another important read on the U.S. economy later Thursday, when the Bureau of Economic Analysis is scheduled to publish the second estimate of first-quarter 2026 gross domestic product. Investors are also awaiting the Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge, along with personal income and spending figures. The releases could influence expectations for the next phase of U.S. monetary policy.
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In equity markets, Taiwan marked a major milestone by overtaking India as the world’s fifth-largest stock market. Taiwan’s market capitalization reached $4.95 trillion, driven by the strength of its semiconductor ecosystem and global demand for AI chips. Taiwan Semiconductor Manufacturing Company, which accounts for about 42% of the benchmark index, has rallied 49% this year.
In the United States, the Federal Reserve’s Inspector General has opened an inquiry into how the Board of Governors reappoints regional Fed presidents and their deputies. The investigation will assess whether the process follows Federal Reserve Administrative Manual requirements and best practices, and will examine the quality of executive performance evaluations. The review comes amid continued scrutiny of transparency and concerns about potential political influence in the selection process.
Elsewhere, Bolivia’s economic and political strains deepened as President Rodrigo Paz warned the country was at a “breaking point” after nearly a month of widespread protests. Demonstrations fueled by food and fuel shortages, a severe economic crisis and discontent over the government’s center-right policies have intensified, particularly in La Paz, adding to concerns about social and political stability in the region.
Brent crude oil rose more than 3% overnight to trade around $97 to $98 a barrel after the U.S. military carried out defensive airstrikes against Iranian military sites near the Strait of Hormuz, injecting fresh uncertai…
Read full articleSenior central bank officials are warning that inflation risks may prove persistent as the global economy absorbs the effects of Middle East-related energy volatility and the investment surge around artificial intellige…
Read full articleTaiwan’s stock market has surpassed India’s in market capitalization, becoming the world’s fifth-largest equity market with a valuation of $4.95 trillion.
Read full articleInvestors are awaiting a set of major U.S. economic releases on May 28, 2026, including the second estimate of first-quarter gross domestic product and data on personal consumption expenditures.
Read full articleThe Federal Reserve’s inspector general has opened an inquiry into the process used by the Board of Governors to reappoint regional Federal Reserve bank presidents and their deputies.
Read full articleBolivian President Rodrigo Paz has warned that the country is at a “breaking point” after nearly a month of widespread protests driven by a severe economic crisis.
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