--- title: "Escalating US-Iran Military Conflict and Inflation Concerns Drag Asian Stocks; South Korean Shares Plunge 6%, SK Hynix Drops 9%, Gold Falls Below $4,200, US Treasuries Weaken" type: "News" locale: "en" url: "https://longbridge.com/en/news/289279235.md" description: "The Korea Composite Stock Price Index (KOSPI) fell 6.3%, becoming the worst-performing major index in the Asia-Pacific region, while SK Hynix plunged 9%, leading declines in the chip sector. Nasdaq 100 Index futures dropped 0.8% in tandem. Spot gold fell below the $4,200 per ounce mark, a decline of approximately 2%. The 10-Year Treasury Yield rose 2 basis points to 4.54%. Market focus will shift to US inflation data on Wednesday evening" datetime: "2026-06-10T06:05:25.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/289279235.md) - [en](https://longbridge.com/en/news/289279235.md) - [zh-HK](https://longbridge.com/zh-HK/news/289279235.md) --- # Escalating US-Iran Military Conflict and Inflation Concerns Drag Asian Stocks; South Korean Shares Plunge 6%, SK Hynix Drops 9%, Gold Falls Below $4,200, US Treasuries Weaken Asia-Pacific stocks retreated broadly on Wednesday, with the Korea Composite Stock Price Index (KOSPI) leading regional losses with a drop of over 6%. Chip stocks saw significant pullbacks from high levels. Meanwhile, with US inflation data imminent, market expectations for Federal Reserve rate hikes surged sharply, putting pressure on risk assets. Gold fell below $4,200 per ounce. The KOSPI dropped 6.3%, making it the worst-performing major index in the Asia-Pacific region. SK Hynix plunged 9%, leading the decline in the chip sector. The MSCI Asia Pacific Index fell 2.5%, heading for its fourth close lower in five trading sessions. Nasdaq 100 Index futures dropped 0.8% in tandem, and European stocks also faced downward pressure at the open. Spot gold broke below the $4,200 per ounce level, declining by about 2%. Geopolitically, tensions between the US and Iran continued to escalate. The US military struck 20 targets in Iran, and Iran retaliated against US bases in Jordan and Bahrain. According to Xinhua News Agency, the US Central Command issued a statement saying it had completed "self-defensive strikes" against Iran. This strike was in response to the downing of a US military helicopter on the 8th. Previously, on the 9th, US President Trump stated on social media that Iran had shot down a US Apache helicopter in the Strait of Hormuz. While the two pilots on board were safe, he emphasized that the US must respond to this attack. The bond market remained weak, with the 10-Year Treasury Yield rising 2 basis points to 4.54%. In the Secured Overnight Financing Rate (SOFR) options market, which is closely linked to Fed policy, traders are increasingly betting on multiple rate hikes by the Federal Reserve in the coming months, with some expecting action as early as September. Market focus will shift to US inflation data on Wednesday evening. According to a Bloomberg survey of economists, the annual CPI for May is expected to accelerate from the previous 3.8% to 4.2%, while core inflation is projected to rise slightly from 2.8% to 2.9%. This data is seen as a key signal in determining whether new Federal Reserve Chair Kevin Warsh will maintain a hawkish stance. > - The Korea Composite Stock Price Index (KOSPI) fell 6.3%, becoming the worst-performing major index in the Asia-Pacific region, with SK Hynix plunging 9% to lead declines in the chip sector. > - Nasdaq 100 Index futures dropped 0.8% in tandem, and European stocks also faced downward pressure at the open. > - The 10-Year Treasury Yield rose 2 basis points to 4.54%. > - Japanese government bond futures extended their decline following the 30-year bond auction. > - Brent crude oil rebounded slightly, trading near $92 per barrel. > - Spot gold fell below the $4,200 per ounce mark, a decline of approximately 2%. > - Bitcoin dropped more than 1%, trading around $61,200. ## South Korea Leads Decline: Chip Stocks Pull Back from Highs The KOSPI had previously rallied strongly on the back of the artificial intelligence investment boom, once ranking among the best-performing indices globally this year. However, as concerns over inflated valuations in tech stocks continued to accumulate, South Korea's tech sector, represented by chip manufacturers, came under pressure first. SK Hynix fell 9%, becoming the main drag on the composite index. Susan Chan, Head of Asia Pacific at BlackRock, characterized the tech stock sell-off as an "opportunity," noting that markets have historically shown strong resilience. However, several market participants warned that adjustment pressures would not dissipate in the short term amid the dual squeeze of high valuations and rate hike expectations. "Enthusiasm has built up over months, pushing the stock market to new highs time and again," said John Cunnison, Chief Investment Officer at Baker Boyer Bank. "Therefore, any signal perceived as negative—whether rising inflation or rate hike expectations—will cause the market to lose its footing after this historic rally." ## Rising Rate Hike Expectations: Bond Market Sends Early Signals Following last Friday's US jobs report, which significantly exceeded expectations, bond traders have continued to increase bets on Federal Reserve rate hikes, with some positions pointing to a potential action window as early as September. Higher US interest rates typically drain capital from emerging markets, boost the US dollar, and raise borrowing costs, creating a more challenging environment for risk assets. Rodrigo Catril, a strategist at National Australia Bank in Sydney, stated, "At present, it seems reasonable to judge that the Federal Open Market Committee will remove its dovish bias next week. The risk of new Chair Warsh adopting a hawkish stance should not be ignored. Overall, while the US economy remains resilient, overall inflation is rising. If this situation persists, the pressure on the Federal Reserve to act will only grow." Alex Loo, Senior Asian Economist at TD Securities in Singapore, also pointed out that if tonight's CPI data exceeds expectations, Warsh will find it difficult to maintain the stance that rate cuts are still on the agenda, as recent public statements by several Fed officials have clearly leaned hawkish. In the coming week, several central banks will hold monetary policy meetings: the European Central Bank is scheduled to announce its decision on Thursday, the Bank of Japan will meet on June 16, and the Federal Reserve will make its decision the following day. ## Gold Under Pressure: Technical Breakdown Intensifies Selling Spot gold fell below $4,200 per ounce, accumulating a decline of about 20% from the price levels before the outbreak of the Iran war in late February. The recent break below the 200-day moving average—a long-term momentum indicator widely watched by institutional investors—further triggered technical stop-loss orders, amplifying selling pressure. Bloomberg strategist Garfield Reynolds noted that concerns that the US inflation report might exceed expectations have kept gold under pressure. After a strong jobs report prompted traders to start pricing in a December rate hike, if inflation data also proves strong, the timing of expected rate hikes could move even earlier. ## Other Assets: Bitcoin Weakens, Indonesian Market Stabilizes Bitcoin dropped more than 1%, trading around $61,200. Japanese government bond futures extended their decline after the 30-year bond auction. The Indonesian market showed signs of stabilization: after the government intensified efforts to provide endorsements to foreign investors, the Indonesian rupiah recorded its largest single-day gain in over 13 months, sentiment in the bond market eased, and the stock market closed higher for the second consecutive day. According to Xinhua News Agency, US President Trump stated on social media on the 9th that Iran had shot down a US Apache helicopter in the Strait of Hormuz. While the two pilots on board were safe, he emphasized that the US must respond to this attack. Brent crude oil rebounded slightly from Tuesday's decline as the US carried out military strikes against Iran and tensions in the Middle East escalated, trading near $92 per barrel. ### Related Stocks - [518850.CN](https://longbridge.com/en/quote/518850.CN.md) - [SGOL.US](https://longbridge.com/en/quote/SGOL.US.md) - [GLD.US](https://longbridge.com/en/quote/GLD.US.md) - [IAU.US](https://longbridge.com/en/quote/IAU.US.md) - [GOLD.AU](https://longbridge.com/en/quote/GOLD.AU.md) - [07709.HK](https://longbridge.com/en/quote/07709.HK.md) - [GLDM.US](https://longbridge.com/en/quote/GLDM.US.md) - [UGL.US](https://longbridge.com/en/quote/UGL.US.md) - [EWY.US](https://longbridge.com/en/quote/EWY.US.md) - [00660.HK](https://longbridge.com/en/quote/00660.HK.md) - [AAXJ.US](https://longbridge.com/en/quote/AAXJ.US.md) - [EPP.US](https://longbridge.com/en/quote/EPP.US.md) - [02807.HK](https://longbridge.com/en/quote/02807.HK.md) - [.NDX.US](https://longbridge.com/en/quote/.NDX.US.md) - [QQQ.US](https://longbridge.com/en/quote/QQQ.US.md) - [QQEW.US](https://longbridge.com/en/quote/QQEW.US.md) - [BLK.US](https://longbridge.com/en/quote/BLK.US.md) - [NAB.AU](https://longbridge.com/en/quote/NAB.AU.md) - [NABZY.US](https://longbridge.com/en/quote/NABZY.US.md) - [TD.US](https://longbridge.com/en/quote/TD.US.md) - [GBTC.US](https://longbridge.com/en/quote/GBTC.US.md) - [IBIT.US](https://longbridge.com/en/quote/IBIT.US.md) - [BITO.US](https://longbridge.com/en/quote/BITO.US.md) - [MSTR.US](https://longbridge.com/en/quote/MSTR.US.md) - [COIN.US](https://longbridge.com/en/quote/COIN.US.md) - [BTX.US](https://longbridge.com/en/quote/BTX.US.md) - [BIT.RT*.US](https://longbridge.com/en/quote/BIT.RT*.US.md) - [BDJ.US](https://longbridge.com/en/quote/BDJ.US.md) - [BSTZ.US](https://longbridge.com/en/quote/BSTZ.US.md) - [BIT.RT.US](https://longbridge.com/en/quote/BIT.RT.US.md) - [STRF.US](https://longbridge.com/en/quote/STRF.US.md) - [STRC.US](https://longbridge.com/en/quote/STRC.US.md) - [STRK.US](https://longbridge.com/en/quote/STRK.US.md) - [STRD.US](https://longbridge.com/en/quote/STRD.US.md) ## Related News & Research - [PRECIOUS-Gold steady as traders weigh Israel-Iran ceasefire, inflation risks](https://longbridge.com/en/news/289134194.md) - [Gold has tumbled during the Iran war - exposing a massive myth about geopolitical risk](https://longbridge.com/en/news/289050540.md) - [Gold’s near-term outlook remains bearish, chart shows](https://longbridge.com/en/news/289117638.md) - [Gold falls on rate-hike fears as Middle East hostilities escalate](https://longbridge.com/en/news/289025021.md) - [The Late-Stage Debt Cycle Is A Hidden Gold Tailwind](https://longbridge.com/en/news/289312975.md)