Asian stock markets experienced significant declines on Thursday, with Japan’s Nikkei and Hong Kong’s Hang Seng leading the losses. This downturn followed escalating geopolitical concerns due to indications that the U.S. is considering military action against Iran along with mounting inflationary pressures driven by U.S. trade tariffs.

U.S.-Iran Conflict Creates Panic in Asian Markets

A recent Bloomberg report indicated that U.S. officials might contemplate a military strike on Iran as soon as this weekend. This situation escalated after President Trump’s vague statements that he would decide the next steps “one second before it’s due.”

Iran’s Supreme Leader, Ayatollah Khamenei, rejected Trump’s demands, escalating the already tense situation.

Market Reactions Overview

• Hang Seng Index: Fell by more than 1%, adding to previous losses this week.

• Nikkei 225: Dropped 0.7%, while the broader TOPIX index fell 0.6%.

• U.S. Stock Futures: Also showed losses during Asian trading hours, indicating global investor unease.

Fed Maintains Rates But Cautions on Tariff-Related Inflation

The Federal Reserve kept interest rates unchanged as anticipated. However, Chair Jerome Powell warned that recent U.S. tariffs might contribute to inflation surges during the summer months, further unnerving investors.

As rate-sensitive sectors and emerging markets feel the pressure, traders are responding to global news cycles with increasing vigilance.

Monitoring Market Sensitivities: Economic and Inflation Data

Investors interested in how inflation rates, interest fluctuations, and geopolitical instability impact the markets can track upcoming economic events through the Economics Calendar.

To see how global events influence commodities and risk-sensitive sectors, refer to the Commodities endpoint for the latest pricing trends and sector insights.