Jakarta. Indonesian stocks opened higher on Monday but quickly turned volatile as investors weighed US monetary policy, geopolitical tensions and potential disruptions to global trade and supply chains.

Jakarta Composite Index (JCI) rose 15 points, or 0.24%, to 6,652 at the open before moving between 6,620 and 6,662 in early trading.

Data from RTI showed 1.45 billion shares had changed hands in the opening minutes, with total transactions reaching Rp 637.51 billion ($36.11 million) across 108,137 trades. A total of 246 stocks advanced, 204 declined and 250 were unchanged.

Pluang Research said two closely linked catalysts will shape the US bond market this week. On Wednesday, the US Treasury is set to announce details of its buyback program, which could be increased threefold to fivefold from the previous $2 billion. Historically, a buyback above $4 billion has been enough to trigger a bond rally.

Two days later, the release of August consumer price index (CPI) data will help determine whether the Federal Reserve will raise interest rates at its Sept. 16 meeting. The swaps market currently puts the probability at 60%.

“The combination of these two events creates a classic tension between monetary policy, which tends to push up short-term yields, and fiscal policy, which seeks to contain long-term borrowing costs,” Pluang Research said in a report on Monday.

Phintraco Sekuritas said the rising probability of a rate hike ahead of the Fed’s meeting next week has also drawn attention to the Trump administration’s efforts to prevent such a move.

US President Donald Trump has threatened to halt trade with countries running trade surpluses with the United States unless the Fed cuts interest rates, Phintraco said.

Investors are also watching oil shipments through the Persian Gulf following the latest US-Iran conflict, which could heighten concerns over energy supplies and global trade.

Kiwoom Sekuritas Indonesia then added that continued tensions between the United States and Iran and rising risks to Middle East stability have kept geopolitical developments at the forefront of market concerns.

“This development has kept investors cautious over potential disruptions to global trade and supply chains,” Kiwoom said. “The Russia-Ukraine conflict also remains a risk factor to watch, as it could potentially affect commodity markets and global inflation,”

Domestically, Kiwoom said activity from Mount Anak Krakatau’s eruption had disrupted flight operations in several regions.

“This disruption could potentially pressure transportation, tourism and goods distribution activities should the eruption and volcanic ash impact last longer,” Kiwoom said.

Meanwhile, the government is continuing its state-owned enterprise restructuring drive by shutting down 290 companies, generating around Rp 50 trillion in savings. It is targeting the closure of another 700 SOEs by the end of 2026, with projected efficiency savings reaching Rp 100 trillion.

The policy could improve SOE efficiency and profitability, Kiwoom said, alongside accelerated downstreaming of natural resources.

In regional markets as of 9:14 a.m. Jakarta time, Japan’s Nikkei 225 rose 2.25%, while South Korea’s Kospi jumped 2.97%. Hong Kong’s Hang Seng slipped 0.84% and the Shanghai Composite fell 0.16%.

On Wall Street on Friday, the Dow Jones Industrial Average fell 0.51%, the S&P 500 weakened 0.38% and the Nasdaq Composite declined 0.29%.

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