Key facts
- Asian stocks tumbled and oil prices rose amid an exchange of hostilities between Iran and the U.S.
- Iran's Revolutionary Guards claimed attacks on a U.S. base in Jordan and other targets in retaliation for U.S. strikes.
- The U.S. military targeted Iranian air defence and radar sites near the Strait of Hormuz.
- MSCI's Asia-Pacific index fell 3%, Japan's Nikkei dropped 2%, and South Korea's KOSPI slumped nearly 7%.
- Brent crude rose 0.7% to $92.08 a barrel, and WTI crude climbed 0.6% to $88.73.
- U.S. inflation data is anticipated, with forecasts predicting a 4.2% annual rise in May.
- Traders now expect a 25-basis-point Fed rate hike in December.
- Japan's wholesale inflation accelerated to its fastest pace in three years in May.
- Bank Indonesia unexpectedly raised interest rates to support the rupiah.
- Gold prices fell to an 11-week low.
Global markets showed nervousness following an escalation in Middle East tensions, triggered by U.S. attacks on Iran. Despite the heightened geopolitical risks, investors are holding onto hope that the situation will not derail ongoing peace efforts. Simultaneously, a selloff in artificial intelligence stocks resumed, prompting a broader rotation out of technology shares as a risk-off sentiment permeated the markets. This shift contributed to a significant decline in South Korea's KOSPI index, which fell by nearly 7% as investors sought safer assets. Investors are also awaiting U.S. inflation data, which could influence the Federal Reserve's interest rate outlook, with traders now fully pricing in a December rate hike.