Asian Stocks Fall, Oil at Six-Month High on Iran: Markets Wrap
(Bloomberg) — Asian equities fell and oil rose to its highest level since August as escalating tensions in Iran weighed on sentiment.
The MSCI Asia Pacific Index dropped 0.5% — its first retreat in three days. Markets reopened lower in Hong Kong after the Lunar New Year holidays, while mainland China remained shut. South Korean shares bucked the broader weakness, rising 1.7% to extend their lead as the world’s best-performing market this year.
Treasuries held their gains and gold hovered around $5,000 an ounce after haven demand lifted those assets. Sentiment appeared to stabilize with equity-index futures for the US and Europe edging up 0.2%. Oil edged up to a six-month high with President Donald Trump saying Iran had 15 days at most to strike a deal over its nuclear program, as the US assembled an array of forces in the Middle East.
Caution has resurfaced in markets as US moves on Iran introduce a fresh layer of geopolitical risk, halting a tentative rebound in equities and dampening broader risk appetite. The renewed tensions threaten to derail a nascent recovery that had begun to take hold after weeks of volatility driven by concerns over artificial intelligence-related disruption across sectors and companies.
“Markets are taking it with a pinch of salt, but there’s still that possibility it could escalate, so you’ve got to cover yourself,” said Nick Twidale, chief market analyst at AT Global Markets. “It feels like President Trump is using it as a negotiating tactic. Obviously investors are naturally concerned because it could escalate.”
The US military is stationing a vast array of forces in the Middle East, including two aircraft carriers, fighter jets and refueling tankers. That gives Trump the option for a major attack against Iran as he pressures the country to strike a deal over its nuclear program.
American military buildup in the Middle East means Iran’s window to reach a diplomatic agreement over its atomic activities is at risk of closing, according to the head of the United Nations nuclear watchdog. A potential war would put flows at risk from a region that pumps about a third of the world’s oil.
“The build-up in US military assets does have a dual purpose of offering the option of a strike on Iranian military targets while also building pressure on Iran,” wrote Tony Sycamore, a market analyst at IG Australia. “The current game of diplomatic ‘cat and mouse’ may extend over the next few weeks before a resolution is found, either of a diplomatic or military nature.”
Read: Why US-Iran Tensions Put Focus on Strait of Hormuz: QuickTake
Wall Street gauges fell on Thursday, with alternative asset managers facing sharp declines after private credit fund Blue Owl Capital Inc. restricted withdrawals from one of its funds.
In other corners of the market, the dollar was poised to notch its best week in four months as traders pare back expectations for Federal Reserve interest-rate cuts while geopolitical risks boost the currency’s haven appeal.
The Bloomberg Dollar Spot Index has climbed 0.9% this week, set for its biggest gain since October. Heightened inflation concerns and recent US economic data have clouded the outlook for Fed easing this year, buoying the US currency. A continued buildup of US forces in the Persian Gulf has also burnished the appeal of the dollar, a popular destination during uncertain times.
Besides Iran, traders are also watching Friday’s readings on the economy and inflation, particularly after minutes of the Federal Reserve’s latest meeting showed renewed concerns about price pressures. Also, the US Supreme Court has scheduled Friday as its next opinion day amid a global wait for a ruling on Trump’s tariffs.
“The next question is what would be the impact on inflation,” Hebe Chen, senior market analyst at Vantage Markets, said on Bloomberg Television.
Corporate Highlights:
Johnson & Johnson is preparing a potential sale of the orthopedics unit that it has been planning to separate, with big buyout firms already circling, according to people familiar with the matter. Ted Sarandos, co-chief executive officer of Netflix Inc., said his company’s acquisition of Warner Bros. Discovery Inc. will lead to more films in theaters, addressing a key complaint from Hollywood in the high-stakes battle for one of the industry’s iconic studios. Mirae Asset Securities Co. shares have more than tripled this year as a proxy bet on Elon Musk’s SpaceX ahead of its potential blockbuster initial public offering. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 12:53 p.m. Tokyo time Japan’s Topix fell 1.3% Australia’s S&P/ASX 200 was little changed Hong Kong’s Hang Seng fell 0.6% Euro Stoxx 50 futures rose 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1759 The Japanese yen was little changed at 155.11 per dollar The offshore yuan was little changed at 6.9020 per dollar Cryptocurrencies
Bitcoin rose 0.6% to $67,327.07 Ether rose 0.4% to $1,954.87 Bonds
The yield on 10-year Treasuries was little changed at 4.07% Japan’s 10-year yield declined 2.5 basis points to 2.115% Australia’s 10-year yield declined four basis points to 4.74% Commodities
West Texas Intermediate crude rose 0.5% to $66.78 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Gabrielle Ng, Joanne Wong and Matthew Burgess.
©2026 Bloomberg L.P.
