Asian equity markets declined on Monday as hawkish remarks from Federal Reserve Chair Kevin Warsh revived expectations for a US rate hike in September. In his Jackson Hole address on Friday, Warsh warned that inflation isn’t meaningfully slowing and reaffirmed policymakers’ commitment to returning inflation to their 2% target. Sentiment was also weighed down by a jump in oil prices after the US military targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz. Tech-heavy equity benchmarks in Japan and South Korea led the declines, while shares in China and Hong Kong also moved lower.

Corporate profits in Australia rose 1.8% quarter-on-quarter in the second quarter of 2026, rebounding from a revised 1.5% drop in the first quarter but falling short of market expectations for a 2% increase. The rise was driven mainly by a 6.8% jump in mining profits, which reversed a 9.4% decline in the previous quarter. Profits also went up in professional, scientific and technical services, rising 4.6% after a 4.2% gain. On the other hand, profit growth slowed in manufacturing (1.3% vs 3.3%), construction (1.7% vs 7.8%), and rental, hiring and real estate services (0.3% vs 1.8%), while profits declined in wholesale trade (-2.9% vs 4.3%), transport, postal and warehousing (-2.4% vs 1.2%), and retail trade (-5.2% vs -7.4%). On an annual basis, corporate profits climbed 7.4%, the strongest growth since the fourth quarter of 2022, following a 3.2% rise last quarter.

Gold fell below $4,450 an ounce on Monday, extending a sharp drop in the previous session as hawkish remarks from Federal Reserve Chair Kevin Warsh revived expectations for an imminent interest rate hike. In his Jackson Hole address on Friday, Warsh warned that inflation is not easing significantly and reaffirmed the central bank’s commitment to bringing inflation back to its 2% target, while noting that financial conditions are not currently restrictive. Markets are now pricing in around a 57% chance of a 25-basis-point Fed rate hike in September, up sharply from roughly 40% a week earlier. Gold also remained pressured by rising oil prices after the US military targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz, marking the first such attack in more than a month. Still, the metal is on track to gain over 10% for the August, driven in large part by the so-called debasement trade.

Japan’s industrial production edged up 0.1% month-over-month in July 2026, defying market expectations for a 0.6% decline and extending gains for a fourth straight month, preliminary data showed. The result followed June’s 1.9% increase, the fastest pace in five months, suggesting continued resilience in manufacturing despite external uncertainties and uneven global demand. Growth was led by production machinery (5.1% vs 7.7% in June), inorganic and organic chemicals (6.0% vs 2.6%), and electronic parts and devices (2.6% vs -6.1%). These gains were partly offset by declines in transport equipment excluding motor vehicles (-4.7% vs 2.0%), fabricated metals (-3.2% vs 2.2%), and plastic products (-1.1% vs 4.5%). On an annual basis, industrial output rose 4.1%, slowing from 4.9% in June but marking a second consecutive month of growth.

Crude oil climbed above $85 per barrel on Monday, starting the week higher after the US military targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz, marking the first such attack in more than a month. US forces also said they are closely monitoring the waterway and remain prepared to safeguard the free flow of commerce. The US last launched missiles at Iranian targets in late July but has since shifted its focus toward squeezing the country’s economy through sanctions to push Tehran back to the negotiating table. An Iranian official said Friday that resuming diplomacy with the US “isn’t impossible” following constructive discussions with Qatar, a mediator in the conflict. Meanwhile, reports indicated that around 6 to 8 million barrels of crude are still flowing through Hormuz each day despite the absence of a peace agreement between Washington and Tehran.

South Korea’s industrial production increased 0.2% month-on-month in July 2026, easing sharply from an upwardly revised 6.7% rise in June. It was the second consecutive month of growth in industrial production, though the pace slowed sharply from the strongest growth since February 2009, recorded in June, with manufacturing growth slowing sharply (0.2% vs 7.0% in June), supported by the electronic component segment. Manufacturing production eased for both domestic (1.1% vs 3.9%) and overseas (3.1% vs 5.1%) demand. Meanwhile, services activity fell 1.3%, reversing a 0.9% increase in the previous month. On an annual basis, industrial production rose 3.6% in July, after an upwardly revised 6.0% surge in June, marking the second consecutive month of increase.