Major global markets are expected to open cautiously on Monday as investors assess renewed geopolitical tension in the Middle East, sharply higher oil prices and a deepening sell-off in semiconductor and artificial intelligence shares. Defensive assets and energy companies may attract support, while technology-heavy indices are likely to remain under pressure.
Asia prepares for a defensive start
Trading will begin in Asia with sentiment weakened by Friday’s losses on Wall Street. The Nasdaq Composite fell 1.4 per cent, while the S&P 500 declined 1 per cent and the Dow Jones Industrial Average lost 0.8 per cent. Semiconductor shares were among the largest casualties as doubts grew over elevated valuations and the sustainability of spending on artificial intelligence infrastructure.
Hong Kong, Shanghai, Seoul, Singapore and Sydney are therefore likely to open cautiously, with technology exporters particularly exposed. Japanese markets will be closed for the Marine Day holiday, reducing regional liquidity and removing one of Asia’s largest markets from Monday’s session.
Chinese shares may prove more resilient as investors anticipate additional economic support from Beijing. China’s weaker second-quarter growth, subdued consumer demand and continuing property-sector difficulties have strengthened expectations that authorities will accelerate infrastructure spending and government bond issuance.
Europe watches energy and inflation
European markets are expected to begin Monday under moderate selling pressure. Higher oil prices could support energy producers in London, Paris and Frankfurt, but transport companies, manufacturers, retailers and airlines may suffer from concerns about rising operating costs.
Brent crude ended last week above $87 per barrel after gaining sharply amid renewed confrontation involving the United States and Iran. Any further military escalation or disruption affecting Gulf shipping routes could push energy prices higher and revive inflation concerns across Europe.
The FTSE 100 may receive some protection from its large weighting in oil, mining and defensive multinational companies. The DAX and other manufacturing-heavy indices could be more vulnerable because of their sensitivity to energy costs, global trade and Chinese demand.
Wall Street futures likely to remain fragile
US equity futures are expected to indicate a soft or volatile opening unless geopolitical tensions ease before trading begins. Technology and semiconductor companies remain the main area of concern after the Philadelphia Semiconductor Index suffered its steepest weekly decline in more than a year.
Investors will also prepare for a major week of corporate earnings. Results and guidance from leading technology and industrial companies will be examined for evidence that artificial intelligence investment remains commercially sustainable.
Energy shares could continue outperforming, while utilities, consumer staples and healthcare stocks may benefit from a more defensive allocation of capital. Airlines and other fuel-sensitive businesses face the opposite pressure.
Emerging markets confront mixed conditions
Oil-exporting emerging economies may benefit from higher crude prices, while major importers could face renewed pressure on inflation, currencies and trade balances. India and several Asian manufacturing economies are particularly sensitive to sustained increases in energy costs.
Latin American commodity producers could receive support from stronger resource prices, although broader risk aversion may limit foreign investment flows. Across all regions, Monday’s direction will depend heavily on developments in the Middle East and whether investors view Friday’s technology decline as a temporary correction or the beginning of a broader reassessment.
Newshub Editorial in Global Markets – 19 July 2026
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