Asia markets fall on rising Middle East tensions

May 18, 2026 (MLN): Asian markets opened the week in negative territory on Monday as escalating geopolitical tensions in the Middle East rattled investor sentiment and pushed oil prices sharply higher.

Concerns over potential supply disruptions intensified after U.S. President Donald Trump issued a stern warning to Iran, fueling fears of a broader regional conflict.

In a post on Truth Social, Trump warned that “the clock is ticking” for Iran and urged Tehran to “get moving, FAST,” adding that “there won’t be anything left” if swift action was not taken, according to CNBC.

The remarks heightened uncertainty across global financial markets, although the U.S. president did not clarify what measures Washington may pursue.

Crude oil prices surged on mounting concerns over supply risks. Brent crude futures for July delivery climbed 1.90% to $111.34 per barrel, while U.S. West Texas Intermediate (WTI) crude futures for June rose 2.17% to $107.71 per barrel.

Equity markets across the Asia-Pacific region largely traded lower amid the risk-off mood.

Australia’s S&P/ASX 200 declined 1.32%, while Japan’s Nikkei 225 dropped 0.92% and the broader Topix index lost 0.77%.

Hong Kong’s Hang Seng index fell 1.49%, Taiwan’s Taiex shed 1.02%, and China’s CSI 300 remained largely unchanged.

South Korean equities showed mixed performance, with the benchmark Kospi reversing early losses to gain 1.15%, whereas the small-cap Kosdaq index slipped 1.65%.

Meanwhile, Japan’s 10-year government bond yield jumped more than 9 basis points to 2.793%, extending recent losses in bond markets as investors grew increasingly concerned about inflationary pressures stemming from elevated energy prices and rising global yields.

Market sentiment remained fragile as tensions between Washington and Tehran persisted despite a ceasefire reached earlier in April.

The United States has continued its blockade of Iranian ports, while Iran has maintained restrictions in the Strait of Hormuz, a key global oil shipping route.

U.S. stock futures were little changed ahead of key corporate earnings announcements, including results from Nvidia and major U.S. retailers.

Dow futures slipped nearly 100 points, or 0.2%, while futures tied to the S&P 500 and Nasdaq-100 traded near flat levels.

On Wall Street, major indices ended lower on Friday as investors booked profits in technology stocks and rising Treasury yields weighed on sentiment.

The S&P 500 declined 1.24% to close at 7,408.50, while the Nasdaq Composite lost 1.54% to settle at 26,225.14. The Dow Jones Industrial Average fell 537 points, or 1.07%, ending at 49,526.17.

Technology stocks came under heavy pressure following strong recent gains. Intel plunged more than 6%, while Advanced Micro Devices and Micron Technology dropped 5.7% and 6.6%, respectively.

Nvidia fell 4.4%, while Cerebras Systems slid 10% after a sharp rally in the previous session.

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