Markets across Asia tumbled Friday while crude oil costs surged following missile and drone strikes that threatened to undermine the delicate ceasefire between the United States and Iran, triggering American military responses against Iranian installations.
Despite escalating tensions in the Middle East conflict, futures for U.S. markets showed gains.
Market watchers continue monitoring the military situation as diplomatic talks between Washington and Tehran to resolve the conflict show minimal advancement. Iranian officials announced Thursday they were still reviewing the most recent American proposals aimed at ending hostilities.
Japan’s Nikkei 225 declined 1.1% to finish at 62,174.12, falling from Thursday’s record close of 62,833.84. During Thursday’s session, the index had momentarily surpassed 63,000 for the first time ever. SoftBank Group, among Japan’s major corporations, dropped more than 5%.
Other Asian markets also posted losses: South Korea’s Kospi decreased 1.1% to 7,409.63, while Hong Kong’s Hang Seng fell 1.3% to 26,289.50. China’s Shanghai Composite declined 0.3% to 4,167.56, and Australia’s S&P/ASX 200 lost 1.7% to 8,729.40.
Taiwan’s Taiex dropped 0.5%, and India’s Sensex fell 0.6%.
Energy prices moved higher Friday morning after declining the previous day. Brent crude, the global benchmark, increased 1.1% to $101.13 per barrel. Before the Iran conflict started in late February, Brent crude traded around $70 per barrel.
U.S. benchmark crude gained 0.7% to $95.47 per barrel.
U.S. Central Command reported Thursday that it stopped “unprovoked” Iranian strikes targeting Navy vessels in the Strait of Hormuz, though no ships sustained damage. However, President Donald Trump informed reporters the ceasefire with Iran remained in effect.
The United Arab Emirates, an American ally, announced early Friday that its air defense systems were “actively engaging” with incoming missiles and drones.
Energy costs are anticipated to stay high while the Strait of Hormuz, a crucial passage for petroleum and natural gas shipments, remains mostly blocked and American naval restrictions on Iranian ports continue.
Thursday saw U.S. markets retreat from record levels. The S&P 500 benchmark dropped 0.4% to 7,337.11. The Dow Jones Industrial Average slipped 0.6% to 49,596.97, and the tech-focused Nasdaq composite fell 0.1% to 25,806.20.
Whirlpool shares plummeted 11.9% following disappointing earnings results, while Shake Shack crashed 28.3% for similar reasons. McDonald’s edged down 0.1% despite reporting quarterly revenues that exceeded analyst predictions.
Currency markets saw the U.S. dollar weaken to 156.87 Japanese yen from 156.93 yen. The euro strengthened to $1.1729 from $1.1726.
