Asian markets experienced significant declines on Thursday as escalating Iran-US tensions and military actions weighed heavily on investor sentiment. According to NDTV Profit, South Korea's Kospi fell 1.25% while Japan's Nikkei 225 declined 1.74% after reaching a record high in the previous session, with the Topix losing 1.09% and Australia's S&P/ASX 200 slipping 1.14%. The decline came as US equity-index futures also declined alongside regional stocks, with S&P 500 futures falling 0.5% and Nasdaq 100 futures losing 0.6%. As per CNBC, Israeli Prime Minister Benjamin Netanyahu told CNBC that Israel is ready and the U.S. forces are ready, stating "I think Iran should take that into account. I think they are taking into account, but they're playing with fire."
The latest developments in the Middle East conflict have intensified significantly with military actions on multiple fronts. According to NDTV Profit, Iran struck Kuwait International Airport early on Wednesday, a day after the U.S. Central Command said it had intercepted multiple Iranian ballistic missiles and drones and carried out what it described as 'self-defense strikes' on Qeshm Island in the Persian Gulf. The U.S. military said the action followed 'attempted attacks' by Tehran. This escalation follows previous developments where Iran said it will stop exchanging messages with the U.S. and completely close the Strait of Hormuz in retaliation for ceasefire violations, after Iranian state media reported that the government had halted negotiations with the United States on ending the conflict in the Middle East in protest over Israel's actions in Lebanon.
President Trump has sent conflicting messages about the status of peace talks with Iran, creating additional uncertainty in markets. According to CNBC, Trump told CNBC that he 'doesn't care' if the talks fall apart, stating the talks were starting to get "very boring." In a social media post, Trump said discussions with Iran were continuing at a rapid pace, writing "Talks are continuing, at a rapid pace, with the Islamic Republic of Iran. Thank you for your attention to this matter!" Shortly after, Trump issued a social media post saying talks with Iran were continuing and told ABC News on Monday that he expects a deal to extend the ceasefire and reopen the Strait of Hormuz "over the next week," according to a post by the outlet on X. However, Trump also claimed he had negotiated a ceasefire between Israel and terror group Hezbollah after Israeli Prime Minister Benjamin Netanyahu earlier ordered his military to step up its campaign.
Oil prices have remained elevated amid the escalating military actions and geopolitical tensions, with Brent crude holding steady around $96.50 a barrel after the latest developments. According to NDTV Profit, higher oil prices and geopolitical uncertainty weighed on risk sentiment, pushing equity markets lower across Asia and the U.S.. The price surge reflects investor concerns about potential disruption to oil flows through the strategically important Strait of Hormuz, which serves as a critical chokepoint for global energy trade. West Texas Intermediate crude jumped over 8%, topping $94.64 a barrel, with the price surge reflecting investor concerns about potential disruption to oil flows through the strategically important Strait of Hormuz. The surge in energy costs has also spurred losses in Treasuries, with 10-year yields hitting 4.5%. However, market sentiment improved somewhat early Thursday after the US announced a ceasefire between Israel and Lebanon, helping Brent crude reverse a three-day rally and fall more than 1%.
US markets showed significant declines on Wednesday as geopolitical tensions and military developments weighed heavily on investor sentiment. According to NDTV Profit, the Dow Jones Industrial Average dropped 620.72 points, or 1.21%, to close at 50,687.07, while the S&P 500 fell 56.06 points, or 0.74%, to 7,553.72 and the Nasdaq Composite declined 239.92 points, or 0.89%, to settle at 26,853.98. All three major US benchmark indices ended the session in the red, weighed down by losses in the financial and technology sectors, with the small-cap Russell 2000 lagging behind its large-cap peers. US equity-index futures declined alongside regional stocks, with S&P 500 futures falling 0.5% and Nasdaq 100 futures losing 0.6%. The decline came as Asian equities also came under pressure after a weaker-than-expected forecast from Broadcom Inc. added to concerns about market momentum. Alphabet shares slipped 0.7% after the tech giant said it is looking to raise $80 billion in equity offerings, including an investment from Berkshire Hathaway, in an aggressive push to fund expansion of its AI infrastructure.
