Asian stocks are down sharply, led by tech selloff and geopolitical tensions. South Korea's Kospi fell 8% triggering a circuit breaker, now down 6%. Japan and Taiwan also down over 3%. China slightly outperforming. Nvidia's Jensen Huang called the tech selloff a buying opportunity. South Korean authorities announced measures to stem won weakness.

Israel struck military targets in Iran after Iranian missile attacks, testing the fragile ceasefire. President Trump urged Netanyahu not to retaliate but Israel attacked anyway. The relationship between Trump and Netanyahu is reportedly strained. The return to hostilities puts peace talks into question.

Oil jumped 4.5% on Middle East escalation but reaction is more muted than expected given Strait of Hormuz closure. Mitigating factors: Trump administration talking down oil prices, China reducing purchases using stockpiles, OECD countries releasing strategic reserves, some oil still trickling through Gulf. OPEC+ signaled they will allow maximum production once Hormuz opens.

A Fed rate hike is not inevitable but more than 100% priced in. The choice is between hold or multiple hikes - if they hike, they'll be behind the curve. CPI print on Wednesday is critical - consensus 4.2% headline inflation above 4% is too problematic. Fed hoping for Iran peace deal to collapse oil prices for disinflationary wave.

ECB will likely hike 1-2 times as insurance, not a long series. Growth risks in Europe are key - services PMIs softening. Fed bias is to hold despite strong jobs data - wage pressure didn't accelerate and many jobs came in temporary leisure/hospitality. Euro likely to weaken until peace deal in Middle East.