Global Market Today | Asian stocks drop as war drags on, crude oil falls

Stocks fell in Japan and Australia, pulling the broader MSCI Asia Pacific Index down 0.5%. The gauge has declined about 7% since the war began. Treasuries dropped and the dollar gained during the US session, with the currency set for its best week since 2024. US equity gauges also dropped Thursday, although they were off the session lows.

Attention was mostly on oil, with West Texas Intermediate crude dropping as much as 2.5% to almost $79 a barrel on Friday. That came after the Trump administration was weighing a range of options for addressing the spike in oil and gasoline prices amid the war in Iran, Interior Secretary Doug Burgum said. Still, oil is headed for the biggest weekly surge since 2022.

The ongoing US-Israeli offensive against Iran has jolted global energy markets, pushing US crude to multi-year highs amid concerns that disruptions through the Strait of Hormuz may constrain supplies. The conflict is already unsettling flows to key buyers, with top importer China moving to conserve fuel, heightening inflation risks and market volatility if the fighting persists.

“What matters now is whether the war will last days, weeks, or longer,” said Marco Oviedo, senior strategist at XP Investimentos. The possibility that the conflict doesn’t last long “remains the base case, and that the US is winning the battle. But Iran’s refusal to back down is keeping things tense.”

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Iran launched a fresh wave of missile and drone strikes across the Gulf on Thursday evening, with attacks reported in the United Arab Emirates, Bahrain, Qatar and Kuwait. Iranian Foreign Minister Abbas Araghchi told NBC News that his country hadn’t asked for a ceasefire and had no intention of negotiating.
However, the US remains defiant. Trump told Axios he should be involved in selecting a successor, the outlet reported, citing an interview with the president.