South Korean stocks led regional gains, while Brent held at $84.29 and markets priced a 65% chance of a September Fed rate hike.
Asian markets opened with cautious gains on Aug. 4 as investors tracked a broader global rally, even as oil stayed near multi-week lows with the U.S.-Iran conflict still unresolved. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1%, with South Korean stocks climbing as much as 2.1%, while Japan's Nikkei 225 slipped 0.3% and S&P 500 e-mini futures added 0.1%. Overnight sentiment was supported by U.S. manufacturing data showing activity reached its highest level in more than four years in July, helping lift the Dow Jones Industrial Average to a record close. Brent crude rose 0.6% to $84.29 a barrel after dropping to a three-week low on Monday, when U.S. President Donald Trump said he had held off on a fresh attack on Iran as a goodwill gesture in peace talks, though Tehran denied negotiations were taking place. In currency markets, the dollar gained 0.3% against the yen to 157.625 after coordinated intervention by U.S. and Japanese authorities last week, while the U.S. dollar index stood at 99.99, near a two-month low. The 10-year U.S. Treasury yield was up 0.2 basis point at 4.684%, and fed funds futures implied a 65% probability of a 25-basis-point increase at the Federal Reserve's next two-day meeting ending on September 16. Federal Reserve Bank of New York President John Williams said inflation pressures were still expected to ease gradually, but added the Fed would raise rates if inflation failed to slow. Bitcoin and ether each fell 0.5%, to $63,446.35 and $1,857.44, respectively.