Australia

Australian shares are set to fall at market open, as investors look to the unfolding situation in the middle east, and US reporting season picks up.

ASX futures were down 0.4% or 30 points as of 8:00am on Monday, suggesting a lower open.

The threat of broader conflict in the Middle East drove investors to safe-haven assets like US treasuries, gold and utility stocks Friday, while rising oil prices lifted energy shares.

Technology stocks and shares of companies that depend on discretionary spending, including casinos, cruise lines and dating apps, fell. The tech-heavy Nasdaq Composite lost 1.2%, while the S&P 500 shed 0.5%. The Dow Jones Industrial Average, buoyed by gains in UnitedHealth Group, Chevron and JPMorgan Chase, added 0.1%, or about 39 points.

The S&P 500 and Dow industrials managed gains for the week, while the tech-focused Nasdaq declined slightly.

In commodity markets, Brent crude oil rose 5.69% to US$90.89 a barrel while gold was higher at US$1,932.82.

In local bond markets, the yield on Australian 2 Year government bonds was higher at 4.02% while the 10 Year yield was up at 4.46%. US Treasury notes were higher, with the 2 Year yield at 5.05% and the 10 Year yield at 4.61%.

The Australian dollar was unchanged at 62.95 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was up at 100.60.

Asia

Chinese shares closed lower, dragged by consumer and retail stocks. China's consumer prices were flat in September versus the 0.2% increase tipped by economists in a Wall Street Journal poll, weighed by a drop in pork and vegetable prices. Exports fell 6.2% in September compared with the same period a year earlier. The benchmark Shanghai Composite Index ended 0.6% lower at 3088.10, the Shenzhen Composite Index declined 0.8% while ChiNext Price Index slipped 1.1%. Consumer and retail stocks led the losses with Jiangsu Yanghe Brewery JSC down 3.6% and Luzhou Lao Jiao 2.4% lower. Pharmaceuticals and medical stocks gained with Tibet Duo Rui Pharmaceutical adding 4.35% and Haisco Pharmaceutical Group 0.6% higher.

Hong Kong shares closed lower as investors digested China's September inflation and trade data. China's flat headline inflation, weighed by a steep drop in pork and vegetable prices, revived deflation concerns. Meanwhile, exports continued to fall, fanning worries about the global demand for Chinese goods. Retail and consumer stocks led losses. Alibaba fell 3.8% and Meituan shed 3.2%. JD.com plunged 11% after multiple brokers cut their ratings and target prices for the stock on weak 3Q revenue prospects. Nongfu Spring lost 4.5% and Budweiser Brewing was down 4.4%. Shiyue Daotian surged 19% after its debut in Hong Kong on Thursday. The benchmark Hang Seng Index declined 2.3% to close at 17813.45. The Hang Seng Tech Index fell 3.5%.

Japanese stocks ended broadly lower, dragged by sharp falls in tech and pharmaceutical stocks, as concerns about the scope of the Fed's tightening resurface. Rakuten Group dropped 4.3% and Kyowa Kirin sheds 3.3%. The Nikkei Stock Average fell 0.5% to 32315.99. Investors are focusing on crude-oil prices and US Treasury yields amid growing geopolitical tensions in the Middle East. The 10-year Japanese government bond yield rises half a basis point to 0.755%.

Indian shares edged lower, weighed by IT and bank stocks, amid cautious mood ahead of the coming earnings season. Despite the easing inflation rate in September, the Reserve Bank of India could continue to keep liquidity tight against the backdrop of higher US yields and still-uncertain domestic inflation outlook, HSBC analysts said. Quick Heal Technologies fell 5.25% and RateGain Travel Technologies lost 1.85%. Axis Bank was 2.3% lower and State Bank of India dropped 1.7%. Infosys fell 2.2% after trimming its fiscal-year revenue forecast. HCL Technologies rose 2.55% after 2Q net profit gained 9.8% on year. The benchmark Sensex closed 0.2% lower at 66282.74.

Europe

European stocks fell as markets fret about a potential upsurge in violence in the Middle East. "Investors appear to be adopting a safety-first approach ahead of the weekend over concerns we could see the current ongoing build-up of tensions flare up into an escalation involving Hezbollah or Iran," CMC Markets analyst Michael Hewson writes. The Stoxx Europe 600, DAX and CAC 40 fell 1%, while the FTSE 100 retreats 0.6%, with stocks in a wide range of sectors heading lower. Still, oil and defense shares were among relatively few risers as investors ponder the implications of the Israel-Hamas conflict for oil supply and demand and government defense spending.

The FTSE 100 closed 0.59% lower on Friday at 7,599.60 points, with the strength of energy and mining stocks helping limit the downside of the wider blue-chip index, dragged by wealth manager St James's Place after reports on regulatory pressure to change its fee model, which could impact its business in a negative way, CMC Markets UK analyst Michael Hewson writes. More widely, "European equity markets have slipped back at the end of a week that has seen stock markets prove to be remarkably resilient, despite surging oil prices and concern over a possible Israeli incursion into Gaza," Hewson adds.

North America

The threat of broader conflict in the Middle East drove investors to safe-haven assets like US treasuries, gold and utility stocks Friday, while rising oil prices lifted energy shares.

Technology stocks and shares of companies that depend on discretionary spending, including casinos, cruise lines and dating apps, fell. The tech-heavy Nasdaq Composite lost 1.2%, while the S&P 500 shed 0.5%. The Dow Jones Industrial Average, buoyed by gains in UnitedHealth Group, Chevron and JPMorgan Chase, added 0.1%, or about 39 points.

The S&P 500 and Dow industrials managed gains for the week, while the tech-focused Nasdaq declined slightly.

The anticipated Israeli ground invasion of Gaza, aimed at toppling Hamas, has stoked worry among investors that the war could escalate and draw in Hamas ally Iran, which could lead to stricter sanctions on Iranian oil exports and push energy prices higher, said Irene Tunkel, chief US equities strategist at BCA Research.

"That reality is sinking in," she said. "If Iran deliberately joins the conflict, it means that there will be sanctions on Iranian oil. So far [the Biden] administration has been turning a blind eye and letting them trade, and that's no longer going to be the case."

Brent crude futures, the global oil benchmark, logged their biggest daily gain since April, rising 5.7% to close at $90.89 a barrel.

Treasury yields, which have been rising lately and pushing stocks down, edged lower Friday. The yield on benchmark 10-year Treasury notes declined to 4.628%, down from 4.71% on Thursday. Yields fall as prices rise.

Gold futures climbed $97.20 a troy ounce, or 3.1%, to close at $1,927.40 Friday, the biggest daily gain in dollars since the Covid-19 lockdown in April 2020. Gold rose 5.3% on the week, its biggest gain since March's bank failures.

Utility stocks reversed their recent slide. Those in the S&P 500 collectively rose 1.1% on Friday, up 3.6% on the week but still down more than 16% this year.

Major stock indexes traded higher to start Friday, following strong earnings from JPMorgan, Wells Fargo and Citigroup, which collectively reported more than $22 billion in profits during the third quarter. Traders also cheered remarks made before the opening bell by a voting member of the interest-rate setting Federal Open Market Committee, who said he doesn't see a need for borrowing costs to be raised further.

"Disinflation is under way. Economic activity has been resilient. Labor markets are coming into better balance," Patrick Harker, president of the Federal Reserve Bank of Philadelphia told the Delaware State Chamber of Commerce. "I believe that we are at the point where we can hold rates where they are."

Stocks began to turn lower after University of Michigan consumer-sentiment data for October fell short of analysts' expectations. Still, several stocks had blockbuster days.

Dollar General jumped 9.2% to lead the S&P 500 higher. The struggling retailer, down more than 50% this year even after Friday's rise, said it had brought back former CEO Todd Vasos, effective immediately.

Insurer Progressive added 8.1% to close at a new all-time high after reporting third-quarter earnings that exceeded Wall Street's expectations. Rival Allstate got a lift as well, gaining 5.6%.

Energy producers APA and Marathon Oil rose 5.2% and 4.8%, respectively. Diamondback Energy, which drills in West Texas's prolific Permian Basin, climbed 2.6% to a new all-time high.

Like the big banks, money manager BlackRock's third-quarter earnings also beat analyst's expectations. Its shares, however, fell 1.3%. Its shares, however, fell TK%. CEO Larry Fink said the highest Treasury yields in years are prompting clients, such as pension funds, to move money out of stocks and into safer government debt.

"It is going to put some pressure on the equity market as money moves out of equities and permanently go into long-dated bonds," Fink said.