Asian Shares Drop on Iran War Jitters, Oil, Rates
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- Asian shares mostly slipped Tuesday, with Japan’s Nikkei 225 losing 3.6% to 69,788.38, as war-related caution dampened trading following eight days of strong performance.
- U.S. crude fell $1.14 to $72.72 a barrel and Brent crude dropped $1.31 to $76.59 after U.S.-Iran talks raised hopes of ending the conflict and reopening the Strait of Hormuz.
- The 10-year Treasury yield climbed to 4.50% from 4.46%, reflecting speculation the Fed may hike rates to counter inflation driven by war-related oil costs, with a key CPI report due Thursday.
- Big Tech stocks declined on Wall Street, dragging the Nasdaq composite down 1.3% and pulling the S&P 500 1.8% below its recent all-time high despite the Dow’s 148-point gain.
- SpaceX fell 16.4% to $154.60, marking its third straight drop after an initial post-debut rally, having started trading at $135 per share.
- Iran’s military said it had closed the Strait of Hormuz again, though U.S. Central Command disputed the claim, adding to regional uncertainty despite weekend diplomatic talks.
Why it matters: Markets are pricing in both a potential de-escalation in Iran and its inflationary aftermath: while lower oil prices could ease costs, rising Treasury yields signal concern that war-driven inflation may lock in higher interest rates, directly affecting borrowing costs and equity valuations. The divergence between the Dow’s gain and the S&P 500’s tech-led drop reveals a split in market confidence.
