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Asian shares were mixed and oil prices remained high on Wednesday as investors closely tracked the escalation of the conflict in the Middle East.
US benchmark crude oil was down around 0.43% at $74.52 per barrel in the afternoon in Asia â or the morning in Europe. Brent crude, the international standard, slipped around 0.43% at $76.12, although both WTI and Brent remain historically high on the month.
Crude prices rose more than 4% on Tuesday after US President Donald Trump left a Group of Seven summit in Canada early and warned that people in Iranâs capital should evacuate immediately.
Within about eight hours, Trump went from suggesting a nuclear deal with Iran remained âachievableâ to urging Tehranâs 9.5 million residents to flee for their lives. Iran and Israel continued to exchange air strikes on Wednesday.
The fighting has driven prices for crude oil and gasoline higher because Iran is a major oil exporter and it sits on the narrow Strait of Hormuz, through which much of the worldâs crude passes. Past conflicts in the area have caused spikes in oil prices, though theyâve historically proven brief after showing that they did not disrupt the flow of oil.
Japan, meanwhile, reported that its exports fell in May as the auto industry was hit by Trump’s higher tariffs, with exports to the US falling more than 11%. But Tokyo’s Nikkei 225 jumped 0.78% to 38,837.48.
Hong Kong’s Hang Seng dropped 1.17% to 23,698.65 while the Shanghai Composite Index rose 0.3% to 3,388.77.
The Kospi in Seoul gained 0.54% to 2,966.20 while Australia’s S&P/ASX 200 shed 0.1% to 8,533.10.
On Tuesday, US stocks slumped under the weight of higher oil prices and weaker than expected retail sales in May.
Trump raised the temperature on Israelâs fight with Iran by calling for âUnconditional surrender!â on his social media platform and saying, âWe are not going toâ kill Iranâs leader, âat least for nowâ.
The S&P 500 fell 0.8% to 5,982.72 and the Dow Jones Industrial Average dropped 0.7% to 42,215.80. The Nasdaq composite fell 0.9% to 19,521.09.
On early Wednesday morning in the US, S&P futures rose 0.11% to 5,991.50, Dow Jones futures increased less than 1% to 42,245.00, while Nasdaq futures advanced by 0.13% to 21,759.00.
The markets will be looking to the Federal Reserve as it makes a decision on its interest rates today. The nearly unanimous expectation among traders and economists is that the Fed will make no move.
In currency trading early Wednesday, the US dollar fell 0.2% to 144.94 Japanese yen. The euro edged 0.18% higher, to $1.1502.
