Indonesia’s financial market once again came under heavy pressure on Tuesday’s trading session, with both the stock market and the rupiah suffering sharp declines.

Domestic financial markets are still expected to face pressure today. A full projection of today’s market sentiment can be found on page 3 of this article.

The Jakarta Composite Index (IHSG) closed lower on Tuesday (12/5/2026).

Although the benchmark index initially strengthened and even gained as much as 1% early in the session, it eventually reversed course by the end of the second trading session and closed down 0.68% at 6,858.90.

Foreign investors recorded net selling of Rp931.9 billion during yesterday’s trading.

A total of 463 stocks declined, 207 advanced, and 151 remained unchanged. Trading value reached Rp16.29 trillion involving 32.97 billion shares across 2.53 million transactions.

Sector-wise, the healthcare sector became the largest drag on the index after plunging 4.78%, followed by utilities which fell 2.24% and the technology sector which dropped 4.08%.

From the corporate side, PT Mora Telematika Indonesia Tbk (MORA) contributed the biggest pressure on the IHSG with a 24.21-point decline. MORA shares plunged to the lower auto rejection limit (ARB), falling 15% to 7,650.

Other major contributors to the index decline included Astra International (ASII) with a 7.98-point drag, PT Bayan Resources Tbk (BYAN) with 7.15 points, and PT Barito Renewables Energy Tbk (BREN) with 6.64 points.

In the currency market, the rupiah weakened 0.49% to Rp17,490 per US dollar, marking its weakest closing level on record.

The rupiah even touched an intraday low of Rp17,525 per US dollar.

Bank Indonesia Senior Deputy Governor Destry Damayanti said pressure on the rupiah was driven by a combination of external and domestic factors.

“Pressure on the rupiah intensified because the conflict in the Middle East is continuing with increasing intensity. This situation has pushed oil prices higher and increased global uncertainty,” Destry said on Tuesday (12/5/2026).

Domestically, she explained that demand for US dollars also rose due to seasonal factors such as foreign debt repayments, dividend payments, and preparations for the Hajj pilgrimage.

Destry emphasized that Bank Indonesia would continue intervening in the market to maintain rupiah stability.

Meanwhile, in the bond market, the yield on Indonesia’s 10-year government bonds climbed to 6.737% on Tuesday, the highest level in four days.

Rising yields indicate falling bond prices due to massive selling pressure in the market.

On Wall Street, US markets closed mixed on Tuesday or early Wednesday Jakarta time.

The S&P 500 ended lower as technology stocks weakened and oil prices surged after investors reacted to US consumer inflation data that came in higher than expected in April.

The S&P 500 slipped 0.16% to 7,400.96, while the Nasdaq Composite dropped 0.71% to 26,088.20. Meanwhile, the Dow Jones Industrial Average gained 56.09 points or 0.11% to finish at 49,760.56.

Micron Technology shares, which had previously led the rally that pushed the S&P 500 and Nasdaq to record highs, reversed and fell 3.6%.

This came after the stock had surged more than 37% over the past week and around 53% over the past month amid a rally in memory chip makers.

Shares of Advanced Micro Devices (AMD) and Qualcomm also weakened by 2% and 11%, respectively. In April, AMD had jumped more than 74%, while Qualcomm rose over 39%.

Meanwhile, West Texas Intermediate crude futures surged 4.19% to close at US$102.18 per barrel, while Brent crude gained 3.42% to US$107.77 per barrel.

The rise extended the previous day’s gains after President Donald Trump described the month-long ceasefire between the US and Iran as “very weak” and “close to collapsing,” after rejecting Iran’s counterproposal to end the war as “unacceptable.”

In its latest proposal, Iran demanded war compensation, full sovereignty over the Strait of Hormuz, the release of frozen Iranian assets, and the removal of economic sanctions.

With energy prices soaring, investors are now closely monitoring the impact of the Iran conflict on inflation and consumer spending, which still accounts for about two-thirds of the US economy.

In April, the Consumer Price Index (CPI) rose 0.6% monthly, bringing annual inflation to 3.8%.

While the monthly increase matched expectations, the annual figure exceeded economists’ forecast of 3.7%, making it the highest inflation rate since May 2023.

“This is not exactly an avalanche yet, but the trend is moving steadily upward,” Thomas Martin, Senior Portfolio Manager at Globalt Investments, told CNBC International.

He added that inflation is likely to continue rising as long as the Middle East conflict persists and negotiations between the US and Iran show little progress.

“As gasoline prices and other necessities continue climbing, more consumers will come under pressure. Conditions indicate that US households still face major challenges ahead,” he said.