Asian Stock Markets Rise as Oil Prices Pull Back; U.S. CPI in Focus

Asian stock markets posted modest gains on Wednesday, buoyed by a retreat in oil prices after a turbulent start to the week driven by escalating Middle East tensions. Investors, however, remained cautious ahead of a closely watched U.S. inflation report that could influence the Federal Reserve's next moves on interest rates.

Regional equities found some relief as crude oil pulled back from near $120 per barrel, a level reached earlier on fears that conflict involving the United States, Israel, and Iran could disrupt shipping through the Strait of Hormuz — a critical global energy chokepoint. Sentiment improved further after U.S. President Donald Trump suggested the conflict with Iran could be nearing resolution. Adding to the relief, the International Energy Agency reportedly proposed its largest-ever strategic oil reserve release to help stabilize energy markets.

Japan's Nikkei 225 led regional gains, climbing more than 2%, while the broader TOPIX index advanced 1.7%. South Korea's KOSPI surged nearly 4%, extending a more than 5% rally from the prior session, reflecting growing investor confidence in export-driven economies as energy cost pressures eased. Wall Street futures edged modestly higher in Asian trade, signaling a cautiously optimistic tone heading into the U.S. session.

Meanwhile, Chinese equities showed limited movement. The Shanghai Composite traded largely flat, while the CSI 300 index gained 0.5%. Hong Kong's Hang Seng rose 0.3%. Australia's S&P/ASX 200 climbed 0.4%, and futures for India's Nifty 50 ticked slightly higher. Singapore's Straits Times Index was the lone laggard, slipping 0.3%.

With geopolitical risks far from resolved and inflationary pressures still a concern for energy-importing Asian economies, all eyes turned to the U.S. Consumer Price Index data due later Wednesday. The CPI reading is expected to shape expectations around Federal Reserve interest rate policy in the months ahead.