Asian markets slide on fears of prolonged U.S. Iran war

Stock markets across Asia sold off on Friday, with South Korea and Japan leading the declines. Mettis Global reported that investors were weighing the chance of a drawn-out U.S.-Iran conflict and how it could hit crude prices, inflation and worldwide interest rates. South Korea's Kospi slipped about 2.7%, while technology heavyweights SK Hynix lost 4% and Samsung Electronics 3.8%, according to CNBC.

Japan's Nikkei 225 dropped 2.6% and the broader Topix fell 1.86%. Australia's S&P/ASX 200 slipped 1%, and the Hang Seng in Hong Kong fell 1.4%. Nikkei futures also signalled deeper losses, with contracts in Chicago and Osaka quoted at 63,600 and 63,540 against a prior close of 65,270.95. Sentiment was also hit by reports that senior White House advisers had talked with Trump about an Iran conflict that could outlast his current term, possibly stretching past January 2029.

Crude remained under pressure, with West Texas Intermediate futures topping $100 per barrel on Thursday as fighting between the two countries continued. Higher crude also lifted Treasury yields, with the 10-year U.S. Treasury yield rising above 4.95%, its highest since October 2023. Investors now look to August's U.S. consumer price index, with economists polled by Dow Jones expecting a 0.4% monthly rise in consumer prices and annual inflation of 3.4%. The figure is set to be weighed before the Fed's policy meeting on September 16.