Oil Prices Jump Back Above $100 as Asian Markets Show Mixed Results

Oil prices rebounded sharply Tuesday morning with Brent crude climbing nearly 3% to over $103 per barrel, reversing Monday's decline. Asian stock markets displayed mixed performance while U.S. futures retreated as concerns persist over Middle East conflicts affecting global oil supply through the Strait of Hormuz.

BANGKOK (AP) — Asian stock markets displayed uneven performance Tuesday following Monday’s temporary drop in oil costs that helped deliver Wall Street its strongest session since Middle East hostilities commenced.

The relief in crude pricing proved brief, as Brent crude surged almost 3% during early Tuesday trading to reach $103.17 per barrel. American benchmark crude similarly advanced to $96.20 after falling to approximately $93 per barrel the previous day.

American futures contracts retreated, with both S&P 500 and Dow Jones Industrial Average futures declining 0.3%.

During Asian market hours, Japan’s Nikkei 225 advanced 0.4% to 53,928.25 while South Korea’s Kospi soared 2.4% to 5,683.61.

Hong Kong’s Hang Seng climbed 1% to 26,088.07, whereas Shanghai’s Composite index dipped slightly under 0.1% to 4,083.03.

Australia’s S&P/ASX 200 rose 0.3% to 8,606.60 following the central bank’s decision to raise its key interest rate to 4.1%.

Australia’s Reserve Bank increased the cash rate Tuesday from the 3.85% level established at its February 3 meeting, responding to escalating inflation pressures and referencing elevated fuel costs. This marked Australia’s first rate increase since November 2023.

Taiwan’s Taiex climbed 1.4% while India’s Sensex gained 0.1%.

Monday saw the S&P 500 rise 1% to 6,698.38, marking its largest increase in five weeks. The Dow Jones Industrial Average grew 0.8% to 46,946.41, while the Nasdaq composite surged 1.2% to 22,374.18.

Oil pricing has become the primary market driver, with costs jumping from around $70 before American and Israeli military operations against Iran began. Iran has responded by nearly blocking passage through the strategic Strait of Hormuz, where one-fifth of global oil typically travels from Persian Gulf producers to worldwide customers. This blockade has forced oil producers to reduce output since their crude cannot reach markets.

Financial markets worry that prolonged closure of the strait could remove sufficient oil from global supply to push inflation to economically damaging levels.

“The panic is still there, just dialled down a notch as crude slipped off the boil. Brent easing back toward $100 flipped the tape from bunker mentality to opportunistic risk-taking in a heartbeat,” Stephen Innes of SPI Asset Management said in a commentary.

President Donald Trump demanded over the weekend that other nations affected by the Strait of Hormuz closure “take care of that passage” and pledged his country “will help – A LOT!”

American and Israeli forces continue striking what they characterize as military installations in Iran’s capital, while Israel has intensified operations against Iran-supported fighters in Lebanon. Over one million Lebanese residents have been forced from their homes — approximately 20% of the country’s population — as United Nations peacekeepers report Israeli ground forces gathering near the border.

Questions about the conflict’s extent and timeline have disrupted financial markets since fighting started over two weeks ago, though markets historically recover relatively quickly from military conflicts. Many professional investors anticipate similar recovery this time, provided oil prices don’t remain excessively high for extended periods. This expectation has helped maintain U.S. stock values near record highs.

Rising prices complicate the Federal Reserve’s efforts to balance economic growth and inflation control as President Donald Trump pressures the central bank to reduce interest rates. Market participants don’t anticipate Fed rate cuts at this week’s policy meeting concluding Wednesday.

Nvidia, whose processors drive much of the global artificial intelligence transition, increased 1.6% Monday as CEO Jensen Huang promoted AI potential at a conference, projecting $1 trillion in AI chip demand through 2027. The company provided the strongest boost to S&P 500 performance.

In early Tuesday currency trading, the U.S. dollar strengthened to 159.32 Japanese yen from 159.05 yen. The euro weakened to $1.1496 from $1.1507.