Global financial markets remain on uncertain footing as investors await clarity on whether the United States will join Israel in escalating military action against Iran, Bloomberg reports.
The speculation follows last week’s initial Israeli strikes on Iranian nuclear facilities and ongoing warnings from Israeli leadership about further action.
Market reactions have been mixed. The MSCI All-Country World Index of equities showed little movement for the week, reflecting investor caution. Meanwhile, the US dollar is on track for its strongest weekly performance since February, and oil prices remain elevated—up 3.5% for the week—though crude slipped on Friday amid growing sentiment that immediate US involvement is unlikely.
The White House has said President Donald Trump will make a decision within two weeks. Trump is scheduled to discuss national security matters in an Oval Office meeting on Friday. While he has publicly signaled interest in increasing US involvement, his tendency to use two-week timelines without guaranteed follow-through has left investors hesitant to react too strongly.
The uncertainty over US action has added to market volatility, with geopolitical risks already heightened by military developments in Asia and economic pressure points elsewhere. On Friday, China sent 46 military aircraft across the median line of the Taiwan Strait—the largest such sortie since October—following a visit by US lawmakers to Taipei. At the same time, naval vessels from Japan and the United Kingdom were seen near the region.
Elsewhere, the Hong Kong dollar weakened to the lower bound of its trading range against the US dollar, amid record interest rate differentials. The currency briefly touched 7.85, driven by a surge in demand for US dollars and the widest rate gap on record. Hong Kong’s currency had already logged its steepest monthly decline since its 1983 peg to the dollar.
Meanwhile, shares of Chinese retailer Pop Mart tumbled after state media called for stricter oversight of blind-box toys. While the report did not name the company directly, it spurred investor concern about the booming market for its popular Labubu dolls.
In the tech sector, SoftBank founder Masayoshi Son is reportedly exploring a partnership with Taiwan Semiconductor Manufacturing Co. (TSMC) to create a massive AI and robotics manufacturing hub in Arizona. The potential trillion-dollar investment reflects rising interest in US-based high-tech production amid geopolitical tensions.
Real estate and political developments also added to global market watchlists. In the UK, it was revealed that the ex-wife of China Evergrande’s chairman purchased nearly £50 million worth of London properties months after the company defaulted. In Thailand, Prime Minister Paetongtarn Shinawatra is facing public protests and potential political instability after controversial remarks about the military were leaked.
In Europe, the European Union is moving to limit Chinese medical device companies’ access to public contracts worth over €5 million. The policy shift could affect up to €150 billion in government procurement and adds another layer of complexity to EU-China relations.
