Asia Markets Drop as U.S.-Iran Strait of Hormuz Exchange Rattles Investors

CNBC reported Friday that Asia-Pacific equity markets opened broadly lower after U.S. and Iranian forces exchanged fire in the Strait of Hormuz, reigniting fears over a conflict that investors had hoped was stabilising.

Clashes Rock a Fragile Ceasefire

The two sides each accused the other of firing first in the Strait of Hormuz incident. President Donald Trump moved quickly to play down the exchange. He described the engagement as a minor incident during a phone call with a reporter, while separately posting on Truth Social that the U.S. had dismantled the Iranian vessels and drones involved. Trump also warned Tehran that further non-compliance on a nuclear agreement would bring a much heavier military response.

Oil prices climbed on the news but trimmed their early gains. West Texas Intermediate futures for June rose roughly 0.81% to near $95.85 a barrel. Brent crude for July pushed above $101 a barrel, gaining about 1.07%.

Regional Markets Take a Hit

Every major Asia-Pacific index tracked by CNBC finished in negative territory or was pointing there at the open. Japan’s Nikkei 225 shed 0.68% after touching a record high the prior session. Investors locked in profits as geopolitical anxiety spread. Australia’s S&P/ASX 200 fell a steeper 1.74%, while South Korea’s Kospi lost 0.93%.

Mainland Chinese and Hong Kong stocks also retreated. The CSI 300 slipped 0.90% and Hong Kong’s Hang Seng index dropped 1.19%. India’s Nifty 50 declined a more modest 0.50%.

Also Read: What Rising Oil Prices Mean for Global Inflation Outlooks

Toyota Earnings Add to the Pressure

Automaker Toyota Motor compounded the negative tone for Japan’s benchmark. The company disclosed that fourth-quarter operating profit fell 49% year-on-year, with U.S. tariff costs cited as the primary culprit. Toyota shares dropped 1.34% in morning trade, dragging on the wider Nikkei.

Wall Street Set the Tone Thursday

U.S. markets offered a mixed backdrop heading into the Asia session. The S&P 500 closed 0.38% lower at 7,337.11, weighed down by losses in Amazon and key semiconductor names. The Dow Jones Industrial Average shed more than 313 points. The Nasdaq Composite edged down 0.13% to settle at 25,806.20, even after briefly hitting a fresh record intraday. U.S. futures pointed to a flat open Friday morning.

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