Asian Stocks Drop as Inflation Concerns Sink Bonds: Markets Wrap

fmeuw[l[btm)w8makcs9v)lg_media_dl_1.png Nymex, BloombergArticle content(Bloomberg) — Asian stocks opened lower Tuesday as a surge in oil prices linked to the Middle East conflict fueled inflation concerns, prompting traders to scale back bets on interest-rate cuts.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentShares opened lower in Japan and South Korea, which returned after a long weekend. Equity-index futures for the S&P 500 Index and the Nasdaq 100 also edged lower after the underlying gauges erased initial losses to close little changed on Monday.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThe dollar held its gains on Tuesday, while West Texas Intermediate crude steadied after a 6.3% jump in the prior session. European natural gas prices soared as Qatar shut the world’s largest LNG export plant. Gold was a touch higher, trading above $5,330 an ounce.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentConcerns that rising energy costs will send inflation higher and curtail Federal Reserve easing weighed on bonds. The yield on 10-year Treasuries climbed 10 basis points during the US session to 4.03%. Traders are now fully pricing in a first US rate cut for September, with bets on a third reduction in 2026 almost evaporating.Article content“There are more questions than answers right now,” said Chris Larkin at E*Trade from Morgan Stanley. “A stabilizing energy picture could have a positive ripple effect, while concerns about a longer-term disruption could have the opposite.” Article contentAs US-Israeli strikes on Iran reverberated across the Middle East, President Donald Trump insisted there was no fixed timeline, while Defense Secretary Pete Hegseth rejected the idea of an “endless” war with Iran.Article contentSecretary of State Marco Rubio said the US military would step up its attacks against Iran and “the hardest hits are yet to come from the US military.” The next phase will be even more punishing on Iran than it is right now, he added.Article contentArticle contentAmid the escalating conflict, the greenback climbed against all G-10 currencies Monday, leaving the yen trading around 157 per dollar. Australia’s 10-year yield jumped early Tuesday, as Reserve Bank Governor Michele Bullock said the central bank was “very alert” to the potential implications for inflation expectations from the Middle East conflict and is “well positioned” for a policy response if required.Article contentThe recovery in major equity indexes in the US from session lows suggests that, for now, the market views the conflict as a relevant geopolitical risk, but one that remains financially contained in the immediate term, according to Antonio Di Giacomo at XS.com.Article contentMorgan Stanley strategists led by Mike Wilson see the conflict in the Middle East as unlikely to derail their bullish view on US stocks, barring a sharp and sustained surge in oil.Article content“In the end, the Iran military action should remove major uncertainty in the world, and the stock market is expected to have a relief rally as new, pro-Western leadership in Iran emerges and crude oil exports resume,” said veteran strategist Louis Navellier.Trending As East-West pipeline divide persists, Atlantic Canada's energy isolation is only getting worse Oil & Gas Shocks can force Bank of Canada to hike rates even when economy weak, says deputy Economy Trump administration loses push to delay tariff refund fight Economy Saudis pulled deeper into Middle East war after refinery attack Energy PDAC 2026: Hodgson says Canada's mining sector is at a 'hinge moment' while announcing new critical minerals projects Mining Article contentCorporate Highlights:Article contentBlackstone Inc. is allowing investors to redeem a record 7.9% of shares from its flagship private credit fund, the latest sign of unease in an industry that’s faced a wave of withdrawals.US officials are considering caps on the number of AI accelerators Nvidia Corp. can export to any one Chinese company, which would further constrain the chipmaker’s reentry into a crucial market.Anthropic PBC’s artificial intelligence chatbot Claude and related consumer-facing applications went down on Monday, with the startup saying it has been grappling with “unprecedented demand” for its services over the past week.Nvidia agreed to invest $4 billion in two companies that develop data center optics that are essential for artificial intelligence.Apple Inc. unveiled the iPhone 17e, the latest version of its lower-end smartphone, and a faster version of the iPad Air.Paramount Global’s long-term issuer default rating was downgraded by Fitch to BB+ from BBB-.BlackRock Inc.’s Global Infrastructure Partners LP and EQT AB agreed to buy AES Corp. for about $10.7 billion in cash as the market heats up for power plant developers that can provide electricity for AI data centers.Article contentArticle contentSome of the main moves in markets:Article contentStocksArticle contentS&P 500 futures fell 0.2% as of 9:14 a.m. Tokyo timeHang Seng futures rose 0.9%Japan’s Topix fell 1.1%Australia’s S&P/ASX 200 fell 0.8%Euro Stoxx 50 futures fell 2.5%Article contentCurrenciesArticle contentThe Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1691The Japanese yen was little changed at 157.36 per dollarThe offshore yuan was little changed at 6.8948 per dollarThe Australian dollar was little changed at $0.7097Article contentCryptocurrenciesArticle contentBitcoin fell 0.9% to $68,778.59Ether fell 0.9% to $2,026.19Article contentBondsArticle contentThe yield on 10-year Treasuries was little changed at 4.03%Australia’s 10-year yield advanced eight basis points to 4.71%Article contentCommoditiesArticle contentWest Texas Intermediate crude fell 0.3% to $71.04 a barrelSpot gold rose 0.5% to $5,346.28 an ounceArticle contentThis story was produced with the assistance of Bloomberg Automation.Article content—With assistance from Richard Henderson.Article contentShare this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. As East-West pipeline divide persists, Atlantic Canada's energy isolation is only getting worse Oil & Gas Shocks can force Bank of Canada to hike rates even when economy weak, says deputy Economy Trump administration loses push to delay tariff refund fight Economy Saudis pulled deeper into Middle East war after refinery attack Energy PDAC 2026: Hodgson says Canada's mining sector is at a 'hinge moment' while announcing new critical minerals projects Mining