Asian shares were mostly higher Wednesday with several benchmarks giving up much of their early gains as investors awaited signals on when the war with Iran may end.
US futures rose and oil prices were mixed.
Tokyo's Nikkei 225 gained 1.3% to 54,926.50 and South Korea's Kospi picked up 0.6% to 5,562.40 after gaining more than 3% earlier in the day.
In Hong Kong, the Hang Seng fell back, slipping 0.2% to 25,921.02, while the Shanghai Composite index edged 0.2% higher to 4,131.39.
Australia's S&P/ASX 200 rose 0.6% to $8,743.50.
Taiwan's benchmark climbed 4.1% and the Sensex in India fell 1.1%. In Bangkok, the SET gained 1.3%.
Oil prices have remained sharply below their peaks hit on Monday. Such spikes have been rocking financial markets worldwide because of worries that the war could block the global flow of oil and natural gas for a long time.
“Asian equities and global futures managed to steady the ship today, helped by crude holding just below the psychologically charged $90 line. In the current regime, that single number functions less like a price and more like a pressure valve,” Stephen Innes of SPI Asset Management said in a commentary.
Early Wednesday, the price for a barrel of Brent crude, the international standard, was down 2 cents at $87.78. That’s about 10% below its settlement price the day before.
US benchmark crude oil gained 53 cents to $83.98 per barrel.
Oil prices plunged Monday afternoon from a high of nearly $120 per barrel, its most expensive level since 2022, after President Donald Trump told CBS News he thinks “the war is very complete, pretty much.” That raised hopes that the war may end relatively soon, which could allow oil to flow freely again from the Middle East to customers around the world.
However, both sides have sharpened their rhetoric as the war enters its 11th day. US Defense Secretary Pete Hegseth promised the most intense strikes yet while the Pentagon detailed the broader toll of injuries sustained by US troops.
The US said it took out more than a dozen minelaying Iranian vessels Tuesday, and Tehran vowed to block the region’s oil exports, saying it would not allow “even a single liter” to be shipped to its enemies.
One point where Trump has remained clear was his desire to keep the Strait of Hormuz open. The war has effectively blocked the waterway off Iran’s coast, where a fifth of the world’s oil sails on a typical day.
“If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far,” Trump said in a posting on his social media network late Monday.
On Tuesday, the S&P 500 dipped 0.2% to 6,781.48, a day after its latest wild swings caused by extreme moves in the oil market. The Dow Jones Industrial Average fell 34 points, or 0.1% to 47,706.51 and the Nasdaq composite edged higher by less than 0.1% to 22,697.10.
Oracle's shares on the Nasdaq surged 12% in premarket trading early Wednesday after the company reported its earnings and revenue jumped 20% in the last quarter, much better than analysts had forecast.
Stock markets have a history of bouncing back relatively quickly from military conflicts, as long as oil prices don’t stay too high for too long. Uncertainty about whether that may happen this time around has led to stunning swings up and down for markets worldwide, often hour-to-hour.
If oil prices do stay high for long, household budgets already stretched by high inflation could snap under the pressure. Companies would see their own bills jump for fuel and to stock items on their store shelves or in their data warehouses. It all raises the possibility of a worst-case scenario for the global economy, “stagflation,” where growth stagnates and inflation remains high.
In other dealings early Wednesday, the dollar rose to 158.08 Japanese yen from 158.05 yen. The euro rose to $1.1638 from $1.1610.
