Oil Jumps as Hormuz Blockade Sparks Market Selloff – Asia Market Wrap
Oil prices surged while equities and bonds declined after President Donald Trump ordered a blockade of the Strait of Hormuz, escalating tensions with Iran following the breakdown of weekend peace negotiations.
Brent crude climbed 7.4% to just above $102 a barrel on fears that the blockade could disrupt energy flows through the crucial shipping route. Asian stocks fell 1.1%, while S&P 500 futures dropped 0.7% as higher oil prices raised concerns about pressure on global growth. Technology firms such as MediaTek showed resilience, supported by strong sales. European markets were set to open around 1.4% lower.
The dollar — which has acted as a safe haven since the conflict began — strengthened against all major peers. Treasuries declined, while Japan’s 10-year yield rose to 2.49%, the highest level since 1997, amid worries that rising energy costs could fuel inflation.
Trump’s escalation damped sentiment after global equities recorded their strongest weekly gain in more than two years, while Brent posted its steepest weekly drop since 2022. Despite this, the relatively contained pullback on Monday suggests investors still hold cautious optimism that a resolution may eventually be reached, limiting broader economic fallout.
Elsewhere, Hungary’s currency strengthened against both the euro and the dollar after Prime Minister Viktor Orban was removed from power in a decisive election victory for a pro-European opposition, a result seen as supportive for unlocking European Union funding. European natural gas prices also surged early in the session, with Dutch benchmark futures jumping as much as 18% to €51.30 per megawatt-hour.
Gold fell 0.7% to around $4,720 an ounce as rising oil prices reinforced expectations that interest rates may stay higher for longer, reducing the appeal of non-yielding assets. Bitcoin edged lower to roughly $71,000.
