Asian Markets Tumble As US-Iran Fighting Lifts Oil, Bond Yields; Kospi Falls 3%

Last Updated:September 02, 2026, 08:09 IST

MSCI’s broadest index of Asia-Pacific shares outside Japan falls 0.8% in early trading as South Korea’s KOSPI dros 3% on the open and Japan’s Nikkei 225 sinks 2.2%.

Asian Markets Today.

Stocks slumped at the start of the Asian trading session on Wednesday as a bond market-induced panic on global markets spilled over into the region, after renewed attacks by the U.S. on Iran pushed oil prices higher.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.8% in early trading as South Korea’s KOSPI dropped 3% on the open and Japan’s Nikkei 225 sank 2.2%. S&P 500 e-mini futures were flat.

Brent crude futures extended gains into a second day as trading resumed in Asia, rising 0.7% to $95.34 a barrel after the US launched a barrage of airstrikes on Iran on Tuesday, which earlier pushed oil prices to a five-week high.

“The threat of further disruptions to the Strait of Hormuz has brought about renewed anxiety over inflation, driving a selloff in stocks across most major markets and a rout in global bond markets,” Westpac analysts wrote.

The yield on the US 10-year Treasury bond was up 0.4 basis point at 4.798% as the US dollar index, which measures the greenback’s strength against a basket of six currencies, held near the highest levels of the past two weeks at 99.67.

Overnight on Wall Street, the S&P 500 slipped 0.7% and the Nasdaq Composite fell 1% as a surge in government bond yields weighed on equities.

The declines came as data from the Institute for Supply Management released on Tuesday showed US manufacturing activity moderated in August amid a slowdown in new orders, but remained in expansionary territory.

Traders believe that the Federal Reserve is likely to lift interest rates at its next meeting in two weeks, though a hike is not certain.

Fed funds futures are pricing an implied 67% probability of a 25-basis-point increase to benchmark borrowing costs at the US central bank’s two-day meeting ending on September 16, compared to a 39.6% chance a week ago, according to the CME Group’s FedWatch tool.

Gold was flat at $4,328.59 an ounce, while bitcoin slipped 0.2% to $77,246.57 and ether was 0.3% lower at $2,412.60.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – Reuters)

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Will the US-Iran conflict further impact global oil prices?

The US-Iran conflict could continue to impact global oil prices due to ongoing anxieties over potential shipping disruptions in the Strait of Hormuz. This critical waterway, which previously handled about a fifth of the world’s oil supplies, has seen restricted shipping and periodic attacks on vessels during the conflict. Analysts note that any major disruptions to these shipping routes are likely to further affect global oil markets and increase energy costs.

How might rising bond yields affect the US economy?

Rising bond yields are likely to drag on the pace of US economic growth by increasing borrowing costs for businesses and consumers. This trend raises the cost of capital across the economy and puts pressure on households, companies, and financial markets. Additionally, higher yields increase the cost for the US government to service its national debt, and they can draw capital away from equities, putting downward pressure on stock markets.

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