Tensions in Strait of Hormuz Rattle Asian Markets

Oil prices climbed, bonds declined, and stocks showed mixed results as President Trump's threats to Tehran over the Strait of Hormuz put traders on alert. Amid regional holidays, markets reacted to Trump's deadline, OPEC+'s decision on oil output, and upcoming U.S. economic data releases.

Oil prices surged, bond yields dipped, and equities fluctuated early Monday in Asia as U.S. President Trump threatened severe consequences if Iran fails to reopen the crucial Strait of Hormuz. Trump's persistent warnings about targeting Iranian infrastructure have fueled fears of retaliatory strikes on Gulf states.

With regional holidays reducing liquidity, S&P 500 e-mini futures declined by 0.2%, while the MSCI's Asia-Pacific index outside Japan gained 0.5%. The Nikkei 225 rose by 1.2%, and South Korea's Kospi advanced 2%. Brent crude futures climbed by 1.4% after OPEC+ decided to increase oil output quotas, though production remains hampered in key regions.

Investor attention also shifts to a slew of upcoming U.S. economic data, including FOMC minutes and CPI figures, which might compete with Middle East developments for market impact. Meanwhile, U.S. jobs data has complicated the Federal Reserve's policy outlook, even as bond yields continue to rise.

(With inputs from agencies.)