Asian stocks fell across much of the region Tuesday after renewed fighting raised fresh doubts about a U.S.-Iran ceasefire. Oil prices moved higher, pressuring airline stocks and leaving markets focused on whether an agreement can reopen the Strait of Hormuz.
For investors watching the Strait of Hormuz, Tuesday’s trading felt like a warning light—bright, quick, and hard to ignore.
Asian shares mostly slipped as renewed fighting threatened the U.S.-Iran ceasefire. U.S. futures also fell.
Japan’s benchmark Nikkei 225 slipped 0.3% to finish at 66,734.24. South Korea’s Kospi dipped 0.2% to 8,772.08. The Hang Seng gained 2.2% to 25,956.72, while the Shanghai Composite rose 0.4% to 4,075.34. Australia’s S&P/ASX 200 shed less than 0.1% to 8,724.40.
The pressure wasn’t coming from corporate earnings or domestic policy so much as from the markets’ most direct link to fuel and trade routes.
On Monday, U.S. stocks ticked to more records, with the S&P 500 adding 0.3% to close at 7,599.96 and the Dow Jones Industrial Average rising 0.1% to 51,078.88. The Nasdaq composite climbed 0.4% to 27,086.81.
But bond traders were watching rates too. The yield for the 10-year Treasury briefly approached 4.52% before regressing to 4.46%, up from 4.45% late Friday.
Oil kept tilting the mood in Asia. U.S. companies with big fuel bills were hurt by rising oil prices. United Airlines lost 2.6%, and Alaska Air Group fell 3.3% after the price for a barrel of Brent crude oil climbed in overnight trading.
In Asian trading Tuesday, benchmark U.S. crude lost 94 cents to $91.22 a barrel. Brent crude, the international standard, slipped 90 cents to $94.08 a barrel. Even so, the levels remained well above the roughly $70 level they were at before the war.
What’s at the center of it all is whether the United States and Iran can reach an agreement to reopen the Strait of Hormuz, allowing deliveries of oil to resume from the Persian Gulf and easing upward pressure on inflation.
Japan imports almost all its oil, though the effects on prices of gas and other products have been relatively contained by the release of the nation’s reserves so far.
“Crude shortages have already forced refiners across Asia and Europe to aggressively reduce runs,” said analyst Stephen Innes. “The result is that the squeeze is no longer confined to crude inventories. It is spreading into the fuels that actually power economies: gasoline, diesel, jet fuel, LPG, and naphtha.”.
Oil may be trading on global headlines, but the ceasefire story is being written in the day-to-day clash between statements from Washington and Tehran.
On Monday, the United States said it bombed Iranian radar and drone sites after Tehran downed an American drone. Iran said it targeted U.S. soldiers in Kuwait with missiles that the U.S. said it shot down.
Despite the back-and-forth, U.S. President Donald Trump said Israel and Hezbollah agreed to dial back their fighting after he spoke with Israeli Prime Minister Benjamin Netanyahu and communicated with the Lebanon-militant group through mediators.
Markets now have to weigh that diplomacy against the renewed fighting raising doubts about the U.S.-Iran ceasefire—and the direct impact it could have on energy flows.
On Wall Street, Nvidia was the strongest force lifting the market and rose 6.2% after CEO Jensen Huang announced several product updates at a conference. What Nvidia does matters immensely for the U.S. stock market because it’s the biggest in terms of overall market value.
Currency trading also shifted. The U.S. dollar rose to 159.72 Japanese yen from 159.66 yen. The euro cost $1.1654, up from $1.1631.
Asian shares U.S.-Iran ceasefire Strait of Hormuz oil prices Nikkei Kospi Hang Seng Shanghai Composite United Airlines Alaska Air Group Treasury yield Nvidia
So basically the markets are scared because of oil again… shocker. Why does the Strait of Hormuz always sound like a video game level?
I don’t even get it, didn’t they say there was a ceasefire already? If it’s wobbly then why are we surprised the stock stuff is dropping. Also airlines got smacked and that feels personal lol.
Wait so Japan stocks fell but Hong Kong went up 2.2%?? That doesn’t make sense if “Asian shares mostly slipped.” Like maybe it’s a different currency effect or whatever. And oil went up but crude was still down on the day?? Confusing.
This article is acting like oil prices are the only reason airlines move. But also the markets were at record highs Monday so of course people took profits. Plus 10-year yield near 4.52% sounds like it’ll crash the whole economy or something. Ceasefire wobbles, Strait of Hormuz, next thing you know my gas is $8 again.