JCI Drops 2 Per Cent as Asian Markets and Wall Street Decline Amid Escalating Iran-US Tensions
The Jakarta Composite Index (JCI) plummeted by 138 points, or 2.06 per cent, to the level of 6,584 at the start of trading on Monday, 18 May 2026. Fanny Suherman, Head of Retail Research at BNI Sekuritas, predicted that the JCI is likely to continue its correction during today’s session, alongside the weakening of the rupiah.
Suherman noted in his daily research that a sharp rise in global oil prices and the lack of progress in US-Iran peace negotiations led to massive sell-offs across Asian stock markets last Friday. Investor concerns regarding surging inflation and interest rate pressures have resurfaced, particularly as disruptions in the Strait of Hormuz continue to constrain global energy trade flows.
In Asia, the Kospi index plunged by more than 6 per cent following sharp corrections in technology and semiconductor stocks, with Samsung Electronics falling 8.6 per cent and SK Hynix dropping 7.7 per cent. This market pressure follows a prolonged rally previously driven by hopes of a Middle East ceasefire. Additionally, Japan’s Nikkei 225 fell 1.99 per cent, Hong Kong’s Hang Seng weakened by 1.62 per cent, and Australia’s ASX 200 decreased by 0.11 per cent. Conversely, reports suggest that Donald Trump and Chinese President Xi Jinping have agreed to oppose Iran’s pursuit of nuclear weapons and wish to keep trade routes in the Strait of Hormuz open.
Suherman identified support for the JCI at the 6,500-6,600 level, with resistance ranging between 6,780 and 6,850.
On Wall Street, markets closed lower last Friday as global inflation fears haunted investors. The surge in oil prices due to heating geopolitical tensions in the Middle East prompted investors to shift from risky assets to US government bonds. The Dow Jones index fell 1.07 per cent, the S&P 500 weakened by 1.24 per cent, and the Nasdaq corrected significantly by 1.54 per cent. Market pressure intensified following sharp rises in crude oil prices, following stern statements from US President Donald Trump and Iranian Foreign Minister Abbas Araqchi, which cast doubt on the sustainability of the ceasefire between the two nations.
There are also growing concerns that disruptions in the Strait of Hormuz could worsen, threatening the global energy supply. Furthermore, Friday marked the final day of Jerome Powell’s term as Chair of the Federal Reserve. The leadership transition to Kevin Warsh faces potential pressure to raise interest rates again should inflation, driven by the Iran conflict, continue to climb.