Key facts
- Asian share markets mostly declined on Monday.
- Oil prices and bond yields rose due to doubts about Middle East peace talks.
- Investors are pricing in a higher risk of U.S. interest rate hikes.
- Iran announced the closure of the Strait of Hormuz.
- U.S. President Donald Trump threatened further attacks on Iran.
Most Asian share markets declined on Monday as doubts about the Middle East peace process sent oil prices and bond yields higher, leading investors to price in a greater risk of increased U.S. interest rates. U.S. President Donald Trump posted that UK Prime Minister Keir Starmer was set to resign and also threatened fresh attacks on Iran. These developments occurred as Vice President JD Vance met Iranian officials for initial talks under an interim peace deal. The talks were complicated by Iran's announcement of closing the Strait of Hormuz, impacting vessel transits. Brent crude futures rose 1.1% to $81.43 a barrel, and U.S. crude firmed 2.7% to $78.70 a barrel. S&P 500 and Nasdaq futures eased, as did European equity futures. Japan's Nikkei edged up, while South Korea's market fell. MSCI's Asia-Pacific index outside Japan also declined. Treasuries remained under pressure due to the Federal Reserve's hawkish stance, with markets pricing in a high chance of a rate hike in September. The dollar was supported against the yen, while the euro and sterling eased. Gold prices slipped.