Asian Markets Jittery Amid Rising Oil Prices Due to Iran-Israel Tensions

Asian markets experienced mixed trading on Wednesday, with oil prices remaining high amid escalating tensions in the Middle East. US benchmark crude oil was down around 0.43% at $74.52 per barrel in the afternoon in Asia, while Brent crude, the international standard, slipped by a similar margin to $76.12. Despite these declines, both WTI and Brent remain high on a monthly basis.

Crude prices surged more than 4% on Tuesday after US President Donald Trump abruptly left a Group of Seven summit in Canada and warned that people in Iran's capital should evacuate immediately. The fighting between Israel and Iran continued on Wednesday, driving up prices for crude oil and gasoline as Iran is a major oil exporter and sits on the narrow Strait of Hormuz, through which much of the world's crude passes.

In Japan, exports fell in May as the auto industry was hit by Trump's higher tariffs, with exports to the US falling more than 11%. However, Tokyo's Nikkei 225 index jumped 0.78% to 38,837.48. Hong Kong's Hang Seng index dropped 1.17% to 23,698.65, while the Shanghai Composite Index rose 0.3% to 3,388.77. The Kospi in Seoul gained 0.54% to 2,966.20, while Australia's S&P/ASX 200 shed 0.1% to 8,533.10.

On Tuesday, US stocks slumped under the weight of higher oil prices and weaker-than-expected retail sales in May. Trump's call for "Unconditional surrender!" on his social media platform and his statement that "We are not going to" kill Iran's leader "at least for now" added to the market uncertainty. The S&P 500 fell 0.84% to 5,982.72, the Dow Jones Industrial Average dropped 0.7% to 42,215.80, and the Nasdaq composite fell 0.91% to 19,521.09.

In early Wednesday morning trading in the US, S&P futures rose 0.11% to 5,991.50, Dow Jones futures increased less than 1% to 42,245.00, while Nasdaq futures advanced by 0.13% to 21,759.00. The markets will be looking to the Federal Reserve for its decision on interest rates today, with the nearly unanimous expectation among traders and economists that the Fed will make no move. In currency trading early on Wednesday, the US dollar fell 0.2% to 144.94 Japanese yen, while the euro edged 0.18% higher to $1.1502.