Asian stock markets started the week with mixed movements as investors grew more cautious over escalating geopolitical tensions in the Middle East. Market participants continue to watch rising global oil prices and await U.S. inflation data that could influence policy direction at the Federal Reserve.

In Japan, the Nikkei 225 was among the strongest performers in the region. By 9:30 a.m. Tokyo time, it rose 631.74 points or 0.89% to 71,881.80.

Meanwhile, China’s equity markets showed little movement. The Shanghai Composite remained unchanged at 4,090.481 from the previous close, while the Shenzhen Component also stayed flat at 16,030.702.

In Hong Kong, the Hang Seng Index likewise remained steady at 23,924.81.

In contrast, Australia’s equity market weakened, with the S&P/ASX 200 falling 13.40 points or 0.15% to 8,815.30.

Stronger pressure was seen in South Korea, where the KOSPI dropped 71.34 points or 0.79% to 8,981.08.

In Southeast Asia, Singapore’s Straits Times Index declined 20.14 points or 0.39% to 5,192.70.

According to CNBC International, global financial markets entered the week with a cautious tone.

Energy markets moved in the opposite direction, with U.S. West Texas Intermediate (WTI) crude rising nearly 3% to around $78 per barrel, while Brent crude, the global benchmark, gained more than 1% to about $81 per barrel.

This movement followed remarks from U.S. President Donald Trump on Sunday, threatening further strikes on Iran if its leaders failed to stop their heavily funded proxy groups in Lebanon from causing disruptions.

His statement came as Vice President JD Vance met Iranian officials in the first round of talks in Switzerland, after earlier negotiations were cancelled.

The key test for markets this week is the release of May Personal Consumption Expenditures (PCE) data on Thursday, the preferred inflation gauge of the Federal Reserve. Even excluding volatile food and energy components, core PCE is expected to rise from April levels, according to economists surveyed by FactSet.

Following last week’s hawkish Fed meeting, expectations for interest rate changes have shifted to as early as October. Investors are now closely watching inflation data that could signal the central bank’s next move.

Although Tom Lee of Fundstrat Global Advisors believes several catalysts—including a Fed task force and supply chain disruptions due to a potential Strait of Hormuz closure—may influence markets ahead, overall conditions remain positive.

He added that while a sharp shift resembling a bearish market could occur later this year, he does not want to rush into calling a market peak.