Asian stock markets traded mixed on Tuesday as investor caution returned amid uncertainty over efforts to end the war in Iran, cooling recent strong gains across the region.
Japan’s benchmark Nikkei 225 fell 0.9% in early trading to 71,681.29, while analysts said the market was taking a breather after a strong rally.
“We’ve had eight days of strong markets. The market was up about 12.5%, and now it has cooled off a little bit,” said Neil Newman, managing director and head of strategy at Astris Advisory Japan.
Australia’s S&P/ASX 200 edged up less than 0.1% to 8,822.10, while South Korea’s Kospi dropped sharply by 2.8% to 8,863.52. Hong Kong’s Hang Seng slipped 0.4% to 23,678.22, and China’s Shanghai Composite gained 0.2% to 4,170.58.
On Wall Street, U.S. stocks closed mixed on Monday as oil prices eased and major technology shares fell. The S&P 500 declined 0.4%, pulling 1.8% below its recent record high after a strong run of gains in recent weeks.
The Dow Jones Industrial Average rose 148 points, or 0.3%, while the Nasdaq Composite dropped 1.3%, dragged down by weakness in major tech stocks.
Oil prices eased after weekend discussions between the United States and Iran over the ongoing conflict. U.S. Vice President JD Vance said the talks had created a “good foundation for a successful final deal.”
Any resolution to the conflict could reopen the Strait of Hormuz, a critical route for global oil shipments. Iran had claimed it closed the strait, but U.S. Central Command disputed the claim.
In early trading Tuesday, U.S. crude oil rose 35 cents to $74.21 per barrel, while Brent crude added 23 cents to $78.13.
Bond yields also moved higher, with the 10-year U.S. Treasury yield rising to 4.50% from 4.46%, as markets speculated that the Federal Reserve could raise interest rates to contain inflation driven by higher energy costs.
Economists expect upcoming U.S. inflation data to show consumer prices rising to 4.1% in May, up from 3.8% in April.
In corporate trading, shares linked to SpaceX fell 16.4% to $154.60, marking a third straight decline after a recent surge following its stock market debut.
Major tech stocks also weighed on the S&P 500, including Alphabet, Amazon and Broadcom, which each dropped between 4% and 5%.
Overall, the S&P 500 lost 27.79 points to close at 7,472.79. The Dow gained 148.01 points to 51,712.71, while the Nasdaq fell 351.33 points to 26,166.60.
In currency markets, the U.S. dollar edged slightly higher to 161.60 Japanese yen, while the euro traded at $1.1427.