Asian Markets Waver as Trump Delays Iran Strike, Oil Prices Retreat

Asian stock markets traded cautiously on Tuesday as investors reacted to U.S. President Donald Trump’s decision to postpone a planned military strike on Iran, easing fears of an immediate escalation in the Middle East conflict. The announcement pushed oil prices lower and helped stabilize global bond markets after a sharp selloff.

Trump stated that Washington paused military action to allow negotiations with Tehran to continue after Iran reportedly delivered a new peace proposal aimed at ending the ongoing conflict. He also expressed optimism that the United States could secure a nuclear agreement preventing Iran from developing nuclear weapons.

Despite the temporary relief, market sentiment remained fragile following a recent drone attack in the United Arab Emirates, which heightened concerns over disruptions in the Strait of Hormuz, a critical global oil shipping route. Analysts noted that investors remain skeptical until shipping traffic in the region returns to normal.

Brent crude oil futures dropped more than 2% to $109.41 per barrel, while U.S. West Texas Intermediate crude slipped 1.3% to $107.25. Even with the decline, oil prices remain significantly above pre-conflict levels, fueling ongoing inflation concerns worldwide.

Asian equities showed mixed performance, with Japan’s Nikkei index gaining 1%, while South Korea’s Kospi fell 2%. MSCI’s Asia-Pacific index outside Japan declined 0.22%. U.S. futures were also subdued ahead of Nvidia’s highly anticipated earnings report, which investors view as a key test for the artificial intelligence-driven stock rally.

Meanwhile, bond markets found some relief as falling oil prices eased inflation fears. U.S. Treasury yields pulled back slightly from recent highs, while Japanese government bond yields also retreated after surging in previous sessions.

In currency markets, the U.S. dollar remained strong against the Japanese yen, trading near 159 yen, increasing speculation about possible intervention from Japanese authorities. Gold prices edged lower as higher bond yields reduced demand for the safe-haven asset.