Asian markets displayed a mixed performance on Tuesday following a significant development involving the U.S. military, which announced that it had conducted what it described as “self-defense” strikes in southern Iran. These strikes targeted missile launch sites and boats suspected of laying mines.
This military action occurred against the backdrop of President Donald Trump’s optimistic updates on social media, where he suggested that negotiations aimed at ending the ongoing conflict were “proceeding nicely.”
In reaction, U.S. futures saw an uptick, while oil prices experienced variability, with Brent crude trading just below the $95 mark per barrel.
The U.S. military justified Monday’s strikes as necessary measures “to protect our troops from threats posed by Iranian forces.” Despite the military’s restraint, supposedly in light of a ceasefire with Iran, the Iranian government has not issued any official response. Details about the specific nature of the threats and how these actions affect ongoing negotiations remain sparse.
With the peace talks’ outcomes still uncertain, financial markets have been influenced by the unfolding events and President Trump’s statements.
Stephen Innes from SPI Asset Management commented on the situation, noting that “Markets are behaving as though a full Iran breakthrough already exists, even though the hardest parts of the negotiation remain unresolved.” He pointed out the contrasting perspectives, with Washington expressing confidence, while Tehran maintains that no agreement is imminent.
Tokyo’s Nikkei 225 lost 0.4% to 64,897.64, falling back from an all-time high close on Monday.
In Hong Kong, the Hang Seng index gained 0.3% to 25,668.55, while the Shanghai Composite index shed 0.7% to 4,122.87.
South Korea’s Kospi jumped 2.9% to 8,075.71, catching up after markets were closed Monday for a holiday.
The S&P/ASX 200 in Australia lost 0.4% to 8,653.80.
The futures for the S&P 500 and the Dow Jones Industrial Average surged 0.6% early Tuesday.
Benchmark U.S. crude oil declined $5.01 or more than 4%, to $91.59 a barrel. Brent crude, the international standard, gained $1.57 to $94.99 a barrel after falling nearly $5 on Monday.
U.S. markets were closed on Monday for the Memorial Day holiday, while European shares advanced.
France’s CAC 40 gained 1.1% and the German DAX rose 1.0%. Britain’s FTSE 100 added 0.2%. Trading will be closed in the U.S. for the Memorial Day holiday.
The gains followed signals of progress toward a peace deal. Regional officials said Sunday that the United States was close to reaching an agreement with Iran to end the war, reopen the Strait of Hormuz and see Iran give up its stockpile of highly enriched uranium,
Reopening the Strait of Hormuz will help decide the direction of oil prices. Its closure due to the war has prevented oil tankers from exiting the Persian Gulf and delivering crude to customers worldwide. Japan, for instance, imports almost all its oil, most of it through the strait.
In other dealings early Tuesday, the U.S. dollar rose to 158.94 Japanese yen from 158.91 yen. The euro cost $1.1634, down from $1.1645.
