Asian equity markets fell sharply and oil prices edged higher as Iran and the United States exchanged their most significant hostilities since a ceasefire agreement in April, while investors also looked ahead to upcoming US inflation data that could shape interest rate expectations, Reuters reports.
Iran’s Islamic Revolutionary Guard Corps said it had carried out attacks on a US base in Jordan and 21 additional targets in the Gulf on June 10, in retaliation for American strikes near the Strait of Hormuz, Iranian media reported.
In response, the US military said on X that it had targeted Iranian air defence systems, ground control stations and surveillance radar sites near the strategic waterway. The strikes followed what US President Donald Trump described as the downing of a US Apache helicopter on June 9.
Financial markets reacted with a broad risk-off move. MSCI’s broadest index of Asia-Pacific shares outside Japan fell about 3%, while Japan’s Nikkei dropped 2%. South Korea’s KOSPI, heavily weighted toward technology stocks, plunged nearly 7% amid a volatile trading week, as concerns over artificial intelligence valuations added further pressure.
European futures were broadly flat, suggesting a muted opening as investors awaited clearer signals on the geopolitical and economic outlook.
Oil prices posted more modest gains, moving away from seven-week lows seen in the previous session. Brent crude futures rose 0.7% to $92.08 a barrel, while US West Texas Intermediate (WTI) crude gained 0.6% to $88.73.
"Geopolitics is being treated as a headline risk, not a macro shock for now," said Charu Chanana, chief investment strategist at Saxo in Singapore. "Oil holding around $90 despite fresh Iran headlines suggests markets are not pricing a sustained supply disruption. That leaves room for a bigger repricing if energy infrastructure, shipping routes or U.S. involvement escalate."
On Wall Street, US stocks declined overnight as a brief tech rebound faded, with concerns over AI valuations, Middle East tensions and expectations of higher interest rates weighing on sentiment. Futures pointed to further weakness, with S&P 500 futures down 0.5% and Nasdaq futures sliding 0.86%.
By Sabina Mammadli
