Asian Shares Dip as Oil Prices and Geopolitical Tensions Weigh on Markets
Asian equities followed the downward trend on Wall Street on Friday, as investors remained focused on rising oil prices and the potential inflationary impact of the escalating conflict in Iran.
The regional stock index fell by 0.5% in early trading, mirroring a 1.5% decline in the S&P 500, which marked its lowest close since November 2025.
Oil prices eased slightly after hitting their highest closing levels since August 2022, driven by defiant statements from both US President Donald Trump and Iran’s new supreme leader, who asserted that the Strait of Hormuz should remain closed.
US Treasury yields held steady in early Friday trading after a decline across the curve the previous day amid inflation concerns. The two-year Treasury yield rose nine basis points to 3.74% on Thursday, while the 10-year yield gained three basis points to 4.26%. Market expectations for Federal Reserve rate cuts in 2026 have largely dissipated.
The dollar index slipped slightly after recently closing at a nearly two-month high. Investors are also awaiting upcoming US inflation data, although the measure may have limited impact given ongoing geopolitical uncertainties.
President Trump emphasized on social media that preventing Iran from acquiring nuclear weapons and protecting Middle East stability is “of far greater interest and importance to me” than oil costs.
Separately, his administration is reportedly planning to waive a century-old maritime law requiring US ships for domestic cargo transport, aiming to ease surging oil prices, according to Bloomberg News. Energy Secretary Chris Wright told CNBC that the US Navy could begin escorting tankers through the Strait of Hormuz by the end of March.
With the Federal Reserve widely expected to maintain interest rates next week, investors will closely monitor any shifts in the central bank’s outlook, even as Trump continues to advocate for rate cuts.
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