Asian equity markets posted broad losses on Tuesday, reacting to higher U.S. Treasury yields and a jump in oil prices after President Donald Trump turned down an Iranian proposal to reopen the Strait of Hormuz.
U.S. market backdrop
Wall Street closed lower on Monday, with the S&P 500 down 0.8%, the Dow Jones Industrial Average down 0.7% and the Nasdaq Composite slipping 0.9%. The 10‑year Treasury yield reached roughly 5.25% early Tuesday, after peaking at 5.27% on Monday – the highest level seen since 2007. Investors are demanding higher returns amid concerns about inflation and the growing federal debt load.
Oil price surge
Brent crude rose 1.8% to $99.63 a barrel, well above the roughly $72 a barrel level recorded in late February before the conflict with Iran escalated. The price increase reflects lingering uncertainty over U.S.–Iran negotiations and the possibility that the strategic waterway for oil transport, the Strait of Hormuz, could remain closed.
President Trump’s stance
President Trump publicly rejected an Iranian offer over the weekend to reopen the Strait of Hormuz, a move the administration says would not guarantee a lasting peace and could jeopardize U.S. leverage in the region. The president’s decision aligns with his broader approach to foreign policy, emphasizing strong negotiation positions and protecting American energy interests.
Asian market reactions
In Japan, the Nikkei 225 fell 1.2% to 65,114.64. South Korea’s KOSPI slipped 0.6% to 6,847.56, while Hong Kong’s Hang Seng index dropped 0.5% to 24,516.46. Hong Kong‑listed shares of fast‑fashion retailer Shein tumbled 11.7% after the company reported a 67% decline in adjusted net profit year‑over‑year.
China’s Shanghai Composite index edged up 0.1% to 3,826.51, buoyed by a report from Xinhua News Agency that the State Council discussed “improving the effectiveness” of macro‑economic policies to support growth. Australia’s S&P/ASX 200 inched up 0.1% to 8,686.20. Taiwan’s Taiex fell 0.6%, and India’s Sensex slipped 0.7%.
Currency movements
The U.S. dollar strengthened slightly, trading at 157.42 Japanese yen versus 157.39 yen the previous day. The euro was quoted at $1.1362, down from $1.1371.
Outlook
Analysts note that while higher yields and oil prices are weighing on equities, the market remains sensitive to any further developments in U.S.–Iran talks. Should diplomatic progress emerge, oil prices could ease, potentially providing relief to the broader market. For now, investors appear cautious, keeping a close eye on both fiscal policy signals from the Trump administration and geopolitical developments in the Middle East.
Original reporting: KTBS 3 (Shreveport) — read the source article.
