Global stocks slide as oil prices climb amid Trump’s Iran warning

Most Asian stock markets declined on Friday while oil prices climbed after Donald Trump heightened Middle East tensions by warning of possible military action against Iran if it failed to reach a “meaningful deal” in ongoing nuclear negotiations.

The comments fuelled geopolitical unease and dampened a tentative market recovery following an AI-driven sell-off earlier in the month. Investors were also cautious ahead of key US economic data due later in the day, which is expected to offer fresh insight into the health of the world’s largest economy.

Recent data releases that exceeded expectations have improved confidence in the economic outlook but reduced hopes for further interest rate cuts.

Speaking at the inaugural meeting of his so-called “Board of Peace,” an initiative aimed at promoting stability in Gaza, Trump said Tehran must agree to a deal, warning that failure to do so could have serious consequences. He made the remarks as the United States moved warships, fighter jets and other military assets into the region, adding that Washington could “take it a step further” if talks collapsed.

Israeli Prime Minister Benjamin Netanyahu also issued a warning, saying any attack by Iran would be met with a response of unprecedented scale.

The rhetoric followed a second round of Oman-mediated talks between the United States and Iran in Geneva, part of efforts by Washington to prevent Tehran from acquiring nuclear weapons—an ambition Iran continues to deny.

Fears of potential conflict in the oil-rich Middle East have driven crude prices sharply higher this week, with gains extending on Friday to their highest levels since June.

Equity markets across Asia reacted nervously. Hong Kong stocks fell on reopening after a three-day holiday, while markets in Tokyo, Sydney, Wellington and Bangkok also posted losses. Seoul, however, advanced to a fresh record on continued technology sector buying, with gains also recorded in Singapore, Manila and Mumbai.

City Index analyst Matt Simpson said the situation appeared more like strategic pressure than an imminent military campaign, noting that diplomacy remained active despite the heightened military posture.

Meanwhile, shares in Jakarta slipped even after the United States and Indonesia reached a trade agreement following months of negotiations. The deal sets a 19 percent tariff on Indonesian exports to the US, down from a previously threatened 32 percent.

Indonesia also agreed to purchase $33 billion worth of US energy products, agricultural goods and aviation equipment, including Boeing aircraft.

Market snapshot (around 0700 GMT):
Tokyo (Nikkei 225): down 1.1%
Hong Kong (Hang Seng): down 0.7%
Shanghai: closed for holiday
WTI crude: up 0.9% at $67.05 per barrel
Brent crude: up 0.9% at $72.27 per barrel
Euro/dollar: $1.1756
Pound/dollar: $1.3448
Dollar/yen: 155.17
New York (Dow): down 0.5%
London (FTSE 100): down 0.6%