Oil Prices Surge Past $111 as Asian Markets Tumble Following Wall Street Drop

Global stock markets declined Thursday as oil prices climbed above $110 per barrel amid ongoing Middle East tensions. The Federal Reserve's decision to pause interest rate cuts and rising inflation concerns added to investor worries.

BANGKOK (AP) — Stock markets across Asia declined Thursday following a significant drop on Wall Street as crude oil prices climbed beyond $110 per barrel.

American equities also fell after new data indicated inflation pressures were mounting even before the conflict with Iran drove energy costs higher. These developments, combined with statements from Federal Reserve leadership, have reduced investor expectations for the interest rate reductions markets typically favor.

Japan’s Nikkei 225 dropped 2.5% to close at 53,875.94, while South Korea’s Kospi declined 1.3% to 5,845.62.

Hong Kong’s Hang Seng index dipped 0.2% to 25,725.77, and the Shanghai Composite fell 0.9% to 4,027.73.

The S&P/ASX 200 in Australia decreased to 8,504.20, and Taiwan’s Taiex declined 1.2%.

International benchmark Brent crude reached $111.24 per barrel, climbing 3.6% from the previous trading session. Domestic U.S. crude oil prices increased 0.8% to $96.80 per barrel.

Wednesday’s trading saw the S&P 500 decline 1.4%, erasing gains for the week. The Dow Jones Industrial Average plummeted 768 points or 1.6%, while the Nasdaq composite dropped 1.5%.

Market declines accelerated after Federal Reserve officials chose to maintain current interest rates rather than continuing reductions designed to support employment and economic growth.

“We just don’t know,” Federal Reserve Chairman Jerome Powell stated regarding future oil price movements and the timeline for President Donald Trump’s tariff policies to fully impact the economy.

Energy prices have risen sharply due to warfare disrupting Persian Gulf production facilities. Iranian state media announced Wednesday that the country would target oil and natural gas infrastructure in Qatar, Saudi Arabia, and the United Arab Emirates following strikes on its South Pars offshore gas field operations.

Extended disruptions keeping energy costs elevated could trigger widespread inflationary pressures throughout the world economy.

Economic data released Wednesday morning revealed inflation concerns were already emerging before military actions began. The report showed U.S. wholesale-level inflation unexpectedly increased to 3.4% last month.