Most Asian stock markets climbed on Wednesday, although major indices pared a significant portion of their early gains as investors awaited indications of when the conflict involving Iran might conclude.
U.S. futures edged higher, while oil prices showed a mixed performance.
In Tokyo, the Nikkei 225 index advanced 1.3 percent to close at 54,926.50. South Korea's Kospi gained 0.6 percent to finish at 5,562.40, after having surged more than 3 percent during the trading session.
Hong Kong's Hang Seng index retreated, declining 0.2 percent to 25,921.02. The Shanghai Composite index in mainland China rose marginally by 0.2 percent to 4,131.39, while Taiwan's benchmark stock index jumped 4.1 percent.
Australia's S&P/ASX 200 increased by 0.6 percent, closing at 8,743.50.
India's Sensex index fell 1.1 percent. Thailand's SET index rose 1.3 percent.
Oil prices remained considerably below the peaks reached on Monday. Sharp price swings are currently impacting global financial markets, driven by concerns that prolonged conflict could disrupt worldwide supplies of oil and natural gas.
Stephen Innes of SPI Asset Management commented, "Asian equities and global futures have stabilized today, supported by crude oil holding below the psychologically significant $90 support level. In the current environment, the $90 mark is no longer just a price but acts more like a pressure valve."
During early Wednesday trading, the international benchmark Brent crude fell by 2 cents to $87.78 per barrel, approximately 10 percent lower than the previous session's settlement price.
The U.S. benchmark crude oil rose by 53 cents to $83.98 per barrel.
On Monday afternoon, oil prices plummeted from a high near $120 per barrel—the highest level since 2022—after former U.S. President Donald Trump stated in a CBS interview that he believed the "war is largely over." This remark fueled hopes for a potential swift end to the conflict and the resumption of unrestricted oil flows from the Middle East to global markets.
However, as the conflict entered its 11th day, rhetoric from both sides intensified. U.S. Secretary of Defense Pete Hegseth pledged the most severe strikes to date, and the Pentagon disclosed broader details regarding injuries among U.S. military personnel.
U.S. officials reported destroying more than a dozen Iranian minelaying vessels on Tuesday, while the Islamic Republic of Iran vowed to blockade regional oil exports, stating it would not allow "even one liter" of oil to reach its enemy nations.
Former President Trump has consistently emphasized his intention to keep the Strait of Hormuz open. The conflict has effectively blockaded this waterway along the Iranian coast, which facilitates the transit of roughly one-fifth of the world's daily oil supply.
In a social media post on Monday evening, Trump stated, "If Iran takes any action to halt the flow of oil through the Strait of Hormuz, they will face a U.S. response twenty times more powerful than any previous strike."
On Tuesday, influenced by extreme volatility in oil markets, the S&P 500 index declined 0.2 percent to 6,781.48. The Dow Jones Industrial Average dropped 34 points, or 0.1 percent, to 47,706.51. The Nasdaq Composite index saw a marginal increase of less than 0.1 percent, closing at 22,697.10.
In pre-market trading on Wednesday, Oracle shares surged 12 percent on the Nasdaq after the company reported a 20 percent jump in both profit and revenue for the previous quarter, significantly exceeding analyst expectations.
Historical trends indicate that stock markets typically recover relatively quickly from military conflicts, provided oil prices do not remain elevated for an extended period. The current uncertainty, however, is causing severe turbulence in global markets, with conditions often shifting dramatically from one hour to the next.
Should oil prices stay high over the long term, household budgets already strained by high inflation would face additional pressure. Corporate costs for fuel, inventory, and data center operations would also rise substantially. These factors heighten the risk of the worst-case economic scenario: stagflation, characterized by stagnant economic growth coupled with persistently high inflation.
In other trading on Wednesday, the U.S. dollar strengthened against the Japanese yen, rising to 158.08 from 158.05. The euro also gained against the dollar, climbing to 1.1638 from 1.1610.
