Rupiah Rescue Operation Begins: Can It Recover Like the JCI?

Indonesia’s financial markets are expected to rise in unison today. For more details on today’s market projections, see page 3 of this article.

The Composite Stock Price Index (JCI) rose 85.16 points or 1.22% to close at 7,057.11 on Tuesday (5/5/2026).

A total of 342 stocks rose, 314 fell, and 163 remained unchanged. Trading value reached Rp16.9 trillion, involving 41.39 billion shares in 2.42 million transactions. Market capitalisation also increased to Rp12,630 trillion.

Turning to the foreign exchange market, the rupiah closed at its all-time weakest level against the US dollar on Tuesday’s trading (5/5/2026). This pressure occurred alongside the announcement of Indonesia’s Q1-2026 economic growth data.

According to Refinitiv data, the rupiah closed down 0.26% at Rp17,410/US$. This position also marked the rupiah’s weakest closing level ever.

Throughout the trading session, the rupiah moved in the range of Rp17,380-Rp17,445/US$. This weakening also extended the Garuda currency’s downtrend to five consecutive trading days.

The rupiah’s movement occurred amid the release of Indonesia’s Q1-2026 economic growth data by the Central Statistics Agency (BPS).

However, the release of economic data that was better than expectations failed to support the rupiah.

The Garuda currency remained pressured against the US dollar amid strong external pressures, particularly the strengthening of the US dollar index and market participants’ cautious stance towards emerging market assets.

In response to the situation, Bank Indonesia (BI) stated it would continue to be present in the market to dampen pressure on the rupiah through measured intervention steps.

From the bond market, the yield on 10-year Government Securities (SBN) weakened to 6.822% from the previous 6.829%. The easing yield reflected rising SBN prices as they were sought after by investors.

From the US stock market, Wall Street strengthened on Tuesday or early Wednesday Indonesian time.

The S&P 500 rose 0.81%, hitting an all-time high and closing at 7,259.22. The Nasdaq Composite strengthened 1.03%, also reaching a new record and closing at 25,326.13. Meanwhile, the Dow Jones Industrial Average climbed 356.35 points, or 0.73%, to 49,298.25.

Crude oil prices fell, providing a boost to the stock market. The West Texas Intermediate crude oil futures contract dropped 3.9% to US$102.27 per barrel. Meanwhile, Brent crude oil futures weakened 3.99% to US$109.87.

The ceasefire between the US and Iran remains fragile amid new attacks in the Strait of Hormuz.

However, Defence Minister Pete Hegseth stated on Tuesday that the ceasefire is holding, and two US commercial ships, along with an American destroyer, have safely crossed the strait, indicating the route is secure.

This follows President Donald Trump’s statement earlier this week that the US would guide trapped ships through the strait.

Positive sentiment in the stock market was also driven by a wave of quarterly earnings reports that once again exceeded expectations.

In particular, DuPont de Nemours shares surged 8% after its first-quarter profit and revenue beat estimates.

Shares of Belgian beer company Anheuser-Busch InBev, listed in the US, also rose more than 8% following strong performance results.

However, Palantir Technologies was an exception, with shares falling nearly 7% despite its first-quarter results exceeding analyst expectations, marking the fastest revenue growth since the company went public in 2020. The company also raised its full-year performance outlook.

So far, around 85% of S&P 500 companies that have reported have beaten expectations, according to FactSet data.

“We are seeing extraordinary performance, not just from large-cap technology companies, but broadly across the S&P 500, even to small-cap US stock indices,” said Zachary Hill, head of portfolio management at Horizon Investments, to CNBC International.

According to him, when combined with market confidence that the US and Iran want some resolution to this conflict, it explains why the market is trading at all-time highs.

Today’s financial markets will face a number of sentiments, both domestic and international. Domestically, economic data developments will be the main driver, while war will be the biggest sentiment from abroad.

War Cooling Down, Oil Prices Fall

US officials are working to maintain the fragile ceasefire with Iran while reopening the Strait of Hormuz, despite the United Arab Emirates reporting new missile and drone attacks from Iran.

US Secretary of State Marco Rubio emphasised that the ship escort mission is defensive and stated that US military operations have concluded. President Donald Trump also reaffirmed that the main goal is to prevent Iran from possessing nuclear weapons.

The Strait of Hormuz was temporarily closed due to the conflict, triggering a surge in energy prices. The US is now escorting commercial ships, while Iran threatens a strong response if the designated route is violated.

Defence Minister Pete Hegseth described the route as starting to be safe, with hundreds of ships queuing up, and the ceasefire still holding despite the situation remaining tense.

This conflict has killed thousands, shaken the global economy, and shows no signs of resolution, though peace talks continue with mediation from Pakistan.

Crude oil prices fell following Hegseth’s remarks. The West Texas Intermediate crude oil futures contract dropped 3.9% to US$102.27 per barrel. Meanwhile, Brent crude oil futures weakened 3.99% to US$109.87.

ISM Services

The ISM Services PMI index dipped slightly to 53.6 in April 2026 from 54 the previous month, in line with market expectations of 53.7, but still well above the previous year’s average.

The business activity and output index rose 2 points to 55.9, underscoring the early resilience of the US economy against pe