Stock Market Today: Asian Stocks Follow Wall Street's Decline as Tensions Escalate in the Middle East - Latest Global News

Stock Market Today: Asian Stocks Follow Wall Street’s Decline as Tensions Escalate in the Middle East

HONG KONG (AP) — Asian stocks fell Monday as worries about potentially escalating tensions in the Middle East rattled financial markets and pushed investors to look for safer places to put their money.

U.S. futures rose and oil prices fell despite tensions in the Middle East, where an attack late Saturday marked Iran’s first military attack on Israel despite decades of hostility dating back to the country’s Islamic Revolution in 1979.

A barrel of benchmark U.S. oil fell 41 cents to $85.25 a barrel. Brent crude, the international standard, lost 24 cents to $90.21. Weaker demand from China and forecasts that supply will grow faster than demand have kept prices under control.

“While the drone strike has grabbed headlines, its immediate impact on global markets, particularly on oil prices and inflation concerns, is likely to be muted,” Stephen Innes, managing partner at SPI Asset Management, said in a commentary. “The precision and limited lethality of the Iranian response suggests a strategic approach aimed at minimizing damage rather than escalating tensions.”

Japan’s benchmark Nikkei 225 slipped 1% to 39,114.19 in morning trade.

In foreign exchange trading, the US dollar rose to 153.71 Japanese yen from 153.07 yen, hitting another 34-year high as investors turned to the traditional haven currency. The euro was at $1.0650, up from $1.0635.

Australia’s S&P/ASX 200 fell 0.6% to 7,743.80. South Korea’s Kospi fell 1.1% to 2,653.06.

Hong Kong’s Hang Seng fell 0.5% to 16,633.37, while the Shanghai Composite rose 1.4% to 3,062.73. Elsewhere in Asia, Taiwan’s Taiex was 1% lower and India’s Sensex fell 1% as the country prepared for a lengthy national election process.

Monday’s decline followed a decline on Wall Street on Friday after a mixed start to the earnings reporting season.

The S&P 500 fell 1.5% to 5,123.41 on Friday, ending its worst week since October, as a huge rally began on Wall Street. The Dow Jones Industrial Average fell 1.2% to 37,983.24, and the Nasdaq Composite fell 1.6% to 16,175.09 from its previous day’s record.

JPMorgan Chase was one of the market’s heaviest weights, falling 6.5% despite reporting higher profits than analysts expected in the first three months of the year. The country’s largest bank gave a forecast for a key source of revenue this year that was below Wall Street’s estimate and predicted only modest growth.

Companies are always under pressure to generate higher profits. However, this is particularly acute now amid fears that the other key lever driving stock prices, interest rates, may not provide much of a boost in the near term.

A series of reports this year have shown that both inflation and the overall economy remain hotter than expected. That has forced traders to scale back their forecasts for how often the Federal Reserve might cut interest rates this year. According to CME Group data, traders are largely expecting just two cuts, while forecasts were cut to at least six earlier in the year.

U.S. stock indexes had already risen to record levels partly on expectations of such cuts. Without cheaper interest rates, companies will have to generate higher profits to justify their share prices, which critics say appear too expensive in many ways.

At the same time, Treasury yields in the bond market fell and gold prices rose, which is typical when investors focus on investments that are considered safer.

The yield on the 10-year Treasury note fell to 4.51% from 4.58% late Thursday.

Adding to the jitters was a preliminary report that suggested sentiment among U.S. consumers was declining. This is an important update because U.S. consumer spending is the main driver of the economy.

Perhaps even more worrisome was that U.S. consumers could become more pessimistic about inflation. Their forecasts for inflation over the next 12 months reached their highest level since December. Such expectations could trigger a self-fulfilling prophecy in which purchases intended to outpace higher prices only fuel inflation.

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