Asian stock markets rebounded sharply Tuesday after a volatile start to the week, driven by easing oil prices and falling bond yields. The change followed remarks from former President Donald Trump indicating recent U.S. military strikes against Iran would remain limited.
Trading floors had been unsettled by retaliatory exchanges after U.S. forces targeted sites in the Strait of Hormuz, a critical route for global energy supplies. Crude oil prices initially jumped as much as 10%, raising inflation fears. The strait handles about a fifth of the world’s oil and gas.
Oil and yields retreat after Trump comments
Brent and West Texas Intermediate crude contracts reduced their gains after Trump stated the bombing campaign would be short. The U.S. military also safely escorted 40 commercial ships carrying 18 million barrels of oil through the strait, which helped steady markets.
Related: Apple Accuses OpenAI of Destroying Evidence in Trade Secrets Suit
Weaker U.S. economic data contributed to the relief. August private-sector job growth fell short of expectations, and job openings dropped below forecasts. The numbers reduced pressure on the Federal Reserve to raise interest rates aggressively. Investors now await next week’s non-farm payrolls and consumer price index reports before the central bank’s September 16 decision.
Stephen Innes, an analyst at Quintex Intel, said the soft economic readings allowed bonds to recover. Treasury yields declined, supporting equities after days of instability.
Regional markets post gains as yen surges
In currency markets, the Japanese yen rose to 158.22 per dollar, sparking speculation of government intervention. The currency later settled, but the movement stood out amid broader foreign exchange volatility.
Related: HSBC Private Bank appoints Feras Al Jaramani UAE
Equity benchmarks across Asia advanced. Japan’s Nikkei 225, Hong Kong’s Hang Seng, Shanghai’s composite index, and Australia’s ASX 200 all climbed in early trading.
The Fed’s upcoming decision remains the main concern for investors. While the August jobs data indicated a cooling labor market, policymakers have suggested they won’t rush to cut rates. Markets expect a cautious approach, but the central bank’s September meeting could still bring surprises if inflation or employment data shifts unexpectedly.
For now, attention has moved away from the Strait of Hormuz. Yet with regional tensions unresolved, traders recognize another incident could quickly push prices—and volatility—higher again.
Leave a Reply