Stocks mixed, oil extends gains as US data fuels economic worries

Asian markets were uneven on Monday as investors weighed fresh US economic data that dampened hopes for a rate hike from the Federal Reserve, but also hinted at a slowdown in the world's largest economy. Positive expectations for a policy stance held off equities last week, driving the S&P 500 and Nasdaq to record highs after favorable reports on jobless claims and inflation.

However, data released on Friday sparked concerns about the economy's health, prompting caution among traders. Retail sales declined 0.6% in July, the steepest monthly drop in over a year, while consumer sentiment plummeted due to the fallout from the US-Iran conflict, with households cutting back on spending and anticipating higher inflation.

The Federal Reserve's chances of maintaining rates at September's meeting fell to one in four, down from the 50:50 probability last week, according to Bloomberg. The focus now shifts to earnings reports from major retailers Walmart, Home Depot, and Target, which could provide further insight into consumer sentiment. Despite worries about the US economy, Asian investors remain optimistic for now, with tech stocks rebounding after a July slump.

Hong Kong saw a boost from Alibaba, Tencent, and JD.com, while Shanghai and Taipei also rose. Tokyo remained unchanged, though chipmaker Kioxia jumped over 5%, and SoftBank, Advantest, and Tokyo Electron gained 1.3 to 2%. The dollar dropped against its counterparts following Friday's decline triggered by the latest data. Oil prices kept climbing from Friday's 1% increase as the US and Iran continued their standoff, with no end in sight to the dispute over the Strait of Hormuz.

Iran firmly asserted its control over the vital energy waterway, dismissing Trump's claim that he would soon declare it part of US territory. With tensions persisting, analysts warned that the crisis could drag on, keeping oil prices high and putting pressure on inflation.