Asian Stocks Mostly Fall as Oil Prices Climb and Fed Hike Bets Build

what happened

Asian stock markets are mostly lower on Tuesday, following mixed moves on Wall Street and higher crude prices. According to TradingView, citing dpa-AFX, the drivers are ongoing hostilities in the Middle East and Eastern Europe, along with rising global yields and inflation worries.

Iran is still asserting control over the Strait of Hormuz, and ship attacks are more frequent than at any point in the war. Houthi militants claimed new attacks across Saudi Arabia, while Russia and Ukraine resumed strikes on energy infrastructure. The S&P/ASX 200 slipped below 8,800, down about 0.7%, pressured by miners and financials. Japan's Nikkei 225 lost roughly 0.6%, SoftBank fell more than 5%, and South Korea dropped 2.5%.

In the US, the Nasdaq gained 1.1% and the S&P 500 rose 0.4%, while the Dow edged lower. European markets closed clearly down, with the DAX losing 1.2% and the CAC 40 and FTSE 100 each down 1.1%. West Texas Intermediate for November delivery rose 2.52% to $103.97 a barrel. TradingView reports that the Fed is widely expected to hold rates next week, while markets price roughly a 94% chance of a hike in December.

why it matters

Expensive oil combined with expectations of higher rates weighs on risk assets: rising yields reduce the appeal of equities, and an energy price shock feeds inflation fears. For Asian markets that depend on imported energy, this adds to the risk.

market impact

Asian equities and the yen: costlier oil and Fed hike bets pressure risk assets

instruments