South Korea's Kospi led the regional recovery with a 2.9% gain, while Hong Kong’s Hang Seng and the Shanghai Composite rose 0.6% and 0.7%, respectively. Japan’s Nikkei Stock Average bucked the trend, slipping 0.1%. This shift follows a turbulent Friday in the U.S., where disappointing earnings from Amazon and Intel deepened concerns regarding the sustainability of the artificial intelligence trade.

Energy markets reacted sharply to geopolitical developments, with West Texas Intermediate crude falling 3.45% to $100.53 a barrel and Brent crude dropping 3.2% to $109.77. Analysts at MUFG noted that while diplomacy could temper geopolitical premiums, the threat of military escalation remains a volatility factor, particularly with U.S. midterm elections approaching. Gold prices saw a modest recovery, rising 0.8% to $3,906.85 per troy ounce, though regional currencies remain under pressure from high U.S. yields and lingering energy costs.