--- title: "Escalating US-Iran Tensions Push Up Oil Prices; Asia-Pacific Stocks Fall Broadly, South Korean Index Drop Widens to 4.5%, Gold Falls Below 4,500" type: "News" locale: "en" url: "https://longbridge.com/en/news/286690719.md" description: "The Seoul Composite Index in South Korea widened its intraday drop to 4.5%, accumulating a decline of over 10% in the past two trading sessions. Spot gold fell more than 1% intraday, breaking below the 4,500 level. Oil prices rose subsequently. Brent crude oil futures gained over 1%. Analysts stated that crude oil prices face further upside risks, which will simultaneously suppress global bond and stock markets. As long as the blockade of the Strait of Hormuz persists, the triple pressure of oil prices, inflation, and interest rates will continue to dominate market trends" datetime: "2026-05-18T23:35:55.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286690719.md) - [en](https://longbridge.com/en/news/286690719.md) - [zh-HK](https://longbridge.com/zh-HK/news/286690719.md) --- # Escalating US-Iran Tensions Push Up Oil Prices; Asia-Pacific Stocks Fall Broadly, South Korean Index Drop Widens to 4.5%, Gold Falls Below 4,500 Tensions between the US and Iran have escalated again, with Netanyahu and Trump holding talks to "discuss the possibility of restarting hostilities against Iran." Trump warned, "Time is running out for Iran; they had better act quickly, or they will lose everything. There is no time to delay!" On May 18, Asia-Pacific stocks opened generally lower, with the MSCI Asia Pacific Index falling 1%. The Seoul Composite Index in South Korea widened its intraday drop to 4.5%, accumulating a decline of over 10% in the past two trading sessions. US stock futures also declined, extending last Friday's downturn in global markets, with Nasdaq 100 index futures dropping 1%. Spot gold fell more than 1% intraday, breaking below the 4,500 level. Oil prices rose subsequently. Brent crude oil futures gained over 1% to approximately $110.50 per barrel, while US WTI crude oil futures rose about 1.75% to $107.26 per barrel. Brent crude has accumulated a gain of nearly 8% last week. The rise in oil prices directly boosted inflation expectations, leading to a sell-off in global bonds and putting pressure on stock markets. This chain reaction is becoming the core logic driving current market operations. Elias Haddad, Global Market Strategist at Brown Brothers Harriman, judged: "The blockade of the Strait of Hormuz will continue to be the dominant driver of the market, as there is no clear end in sight, and the buffer of global oil inventories is shrinking rapidly. Therefore, crude oil prices face further upside risks, which will simultaneously suppress global bond and stock markets." ## Asia-Pacific Stocks Fall Broadly, South Korea Triggers Circuit Breaker The Asia-Pacific market bore the brunt of the impact. The Seoul Composite Index (KOSPI) in South Korea saw its drop widen to 4.5% at one point, accumulating a decline of over 10% in the past two trading sessions. The Korea Exchange triggered a circuit breaker mechanism due to a 5% drop in KOSPI 200 futures, suspending program trading for 5 minutes. Samsung Electronics' stock price fell during the session before turning to gain about 0.7%. In Japan, the Nikkei 225 Index fell about 0.65% to close at 61,008.80 points; the Topix Index remained largely flat. Australia's S&P/ASX 200 Index dropped 0.76%. The MSCI Asia Pacific Index fell about 1%. In Europe, European Stoxx 50 index futures dropped about 0.6%, and German DAX index futures fell about 0.7%. ## Cracks Already Appeared in US Stocks Last Week; Focus on Nvidia Earnings This Week In the US stock market, significant adjustments appeared first last Friday. According to CNBC, the S&P 500 Index fell 1.24% to close at 7,408.50 points; the Nasdaq Composite Index dropped 1.54% to close at 26,225.14 points; the Dow Jones Industrial Average fell 537.29 points (a 1.07% decline) to close at 49,526.17 points. Technology stocks were the hardest hit. Intel fell over 6%, AMD dropped 5.7%, Micron Technology fell 6.6%, and Nvidia dropped 4.4%. Cerebras Systems, which listed on the Nasdaq last Thursday and surged 68% on its first day, gave back 10% on Friday. On Monday, Nasdaq 100 index futures fell about 1%, and S&P 500 index futures dropped about 0.5%. According to Bloomberg, Scott Ladner, Chief Investment Officer at Horizon Investments, stated: "The war with Iran will eventually conclude, and commodity prices will fall back to pre-war levels. However, as the US earnings season draws to a close, investors' attention is shifting back to the macro level, and this macro picture is dominated by higher interest rates—which is always a headwind for the stock market." This week, Nvidia's earnings report and quarterly reports from several major US retailers will be released sequentially, attracting high market attention. ## High Oil Prices Ignite Inflation Concerns; Bond Market Faces "Interest Rate Shock" The continuous rise in oil prices has a core impact on inflation. Energy prices are a direct driver of inflation; the higher oil prices go, the harder it is for central banks to cut interest rates, and they may even be forced to raise rates—creating pressure on both stock and bond markets. The yield on the US 10-year Treasury note rose slightly to 4.61%, the yield on the Japanese 10-year government bond rose about 10 basis points to 2.8%, and the yield on the Australian 10-year government bond increased by 4 basis points to 5.11%. The yield on the Japanese 30-year government bond once climbed to 4% last week, for the first time since 1999; the yield on the US 30-year Treasury note approached the 5% level, a twenty-year high. Kyle Rodda, Senior Analyst at Capital.com in Melbourne, stated: "We are indeed in a 'mini interest rate shock.' Upside risks to interest rates will bring some uncertainty to the market, but this volatility is often two-way." He also pointed out that the stock market may still experience phased brief rebounds. Market expectations for the Federal Reserve have also undergone a fundamental shift. According to Bloomberg, traders are currently betting that the Fed will raise interest rates by next March at the latest—whereas just before the conflict erupted in late February this year, the market expected two 25-basis-point rate cuts in 2026. In just a few months, the interest rate narrative has completely flipped from "rate cuts" to "rate hikes." Finance ministers from the Group of Seven (G7) will meet this week, and the sell-off in the bond market is expected to be one of the topics, but there is currently no consensus on how to alleviate the pressure. ### Related Stocks - [OXY.US](https://longbridge.com/en/quote/OXY.US.md) - [600489.CN](https://longbridge.com/en/quote/600489.CN.md) - [AEM.US](https://longbridge.com/en/quote/AEM.US.md) - [600547.CN](https://longbridge.com/en/quote/600547.CN.md) - [KGC.US](https://longbridge.com/en/quote/KGC.US.md) - [NEM.US](https://longbridge.com/en/quote/NEM.US.md) - [601899.CN](https://longbridge.com/en/quote/601899.CN.md) - [09824.HK](https://longbridge.com/en/quote/09824.HK.md) - [GLD.US](https://longbridge.com/en/quote/GLD.US.md) - [UCO.US](https://longbridge.com/en/quote/UCO.US.md) - [GDX.US](https://longbridge.com/en/quote/GDX.US.md) - [BNO.US](https://longbridge.com/en/quote/BNO.US.md) - [UGL.US](https://longbridge.com/en/quote/UGL.US.md) - [OIH.US](https://longbridge.com/en/quote/OIH.US.md) - 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