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Thick plumes of smoke billowed into the sky following a series of powerful explosions in Tehran, Iran’s capital, as the Israeli military launched a fresh wave of assaults on March 21, 2026.
Investor sentiment in Asia-Pacific markets took a hit on Monday, as tensions in the Middle East escalated with both the U.S. and Iran threatening to ramp up military actions. This comes as the conflict stretches into its fourth week.
On Saturday, President Donald Trump issued a stern warning, pledging to “obliterate” Iran’s power infrastructure if Tehran did not fully reopen the critical Strait of Hormuz within 48 hours. The strait is a key conduit for global energy supplies.
In response, Iran issued a counter-threat, vowing to target energy infrastructure and desalination plants in the Gulf should the U.S. follow through with its threats.
Mohammad Bagher Ghalibaf, Iran’s Parliament Speaker, emphasized on Saturday that any attacks on Iranian power facilities would prompt immediate retaliatory assaults on energy and oil infrastructures across the region.
Iran’s Parliament speaker Mohammad Bagher Ghalibaf said Saturday that attacks on the country’s power plants would “immediately” be met with retaliatory strikes on energy and oil infrastructure across the region.
“Critical infrastructure and energy and oil infrastructure throughout the region will be considered legitimate targets and irreversibly destroyed, and oil prices will rise for a long time,” Ghalibaf said on X.
On Sunday, Ghalibaf extended the threat to U.S. treasury holders, warning financial entities that purchase American government bonds and “finance the U.S. military budget” would be considered legitimate targets, alongside military bases.
Crude prices were largely stable in early trading hours on Monday. Brent crude lost 0.25% to $111.97 per barrel as of 7:16 p.m. EST. The U.S. West Texas Intermediate was down 0.6% at $97.64 per barrel.
Australia’s S&P/ASX 200 declined more than 1.8% in early Asian trade.
Japan’s Nikkei 225 declined 4% on open while the broad-based Topix dropped 2.8%.
South Korea’s blue-chip Kospi plunged 4.6% and the small-cap Kosdaq fell 3.7%.
Hong Kong Hang Seng index futures were also set to open lower, standing at 24,725, compared with the index’s last close of 25,277.32.
Overnight in the U.S., stock futures were little changed. The Dow Jones Industrial Average was flat and the S&P 500 shed 0.1% while the Nasdaq Composite futures pulled back by 0.2%.
The three major indices ended last week lower, with the S&P 500 declining by more than 1.5% and falling below its 200-day moving average for the first time since May. The Dow, which saw its first four-week losing streak since 2023, and the Nasdaq each fell around 2% for the week.
— CNBC’s Fred Imbert contributed to this report.
