Asian markets fall on rising Iran conflict tensions

September 01, 2026 (MLN): Asian equities slid on Tuesday as fears of a fresh escalation in the Middle East conflict rattled investor confidence across the region.

Japan's Nikkei 225 slipped 0.91%, while the Topix index held flat. South Korea's Kospi and the small-cap Kosdaq both dropped over 1% in early dealings. Australia's S&P/ASX 200 benchmark declined 0.36%, according to CNBC.

The regional selloff came as elevated oil prices, driven by mounting Middle East tensions, weighed on sentiment ahead of the opening bell.

Japan's Nikkei 225 futures pointed to a lower start, with the Chicago contract at 65,850 and the Osaka contract last changing hands at 65,820 both below the index's previous close of 66,311.93.

Hong Kong's Hang Seng index futures stood at 25,346, versus the index's last close of 25,566.99. Australia's S&P/ASX 200 futures traded at 9,002, compared with the index's actual close of 9,076.

The regional weakness followed reports that President Donald Trump threatened additional strikes on Iran after Tehran fired missiles overnight at two U.S. air bases in Jordan, retaliating for a U.S. strike on Iran's Larak Island.

At the same time, Trump and top aides were reportedly weighing limited strikes in the Strait of Hormuz to deter Iran from targeting shipping vessels, according to Axios, which cited three U.S. officials.

U.S. stock futures were largely steady Monday night following a down session, even as Wall Street's major indices still closed out August with monthly gains. Dow Jones Industrial Average futures rose 48 points, S&P 500 futures edged up less than 0.1%, and Nasdaq-100 futures were nearly unchanged.

For the month, the S&P 500 gained 2.6% and the Nasdaq Composite climbed 3.9%, while the Dow rose 1.3% marked its fifth consecutive monthly gain.

Wall Street, however, closed out August on a weak note. The Dow slid more than 370 points during Monday's session as rising oil prices pushed interest rates higher, following a U.S. strike on two rocket launchers on Iran's Larak Island.

The S&P 500 and Nasdaq Composite also ended the day in negative territory.

Goldman Sachs traders noted that despite the market trading within 115 basis points of all-time highs heading into the session, several indicators point to growing investor unease, adding that portfolio risk allocations reflect this caution in practice, not just sentiment surveys.

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