Trump's Iran Threat Sparks Market Turmoil, Sending Asian Stocks and Oil Prices into Volatile Swings

President Donald Trump's warning to hit Iran 'extremely hard' over the next two to three weeks sent shockwaves through global markets, triggering sharp declines in Asian equities, U.S. Treasury prices, and the Japanese yen. The remarks, made during a 19-minute national address, reversed earlier gains in Asian markets and sent South Korea's Kospi plunging 4.37%. U.S. stock futures also fell over 1% for the major indexes, while Treasury yields climbed 6 basis points to 4.38% as investors sold off bonds. The U.S. dollar index rose 0.37% to 100.02, and the South Korean won weakened 0.6% against the greenback. Oil prices saw the most dramatic swings, with Brent crude futures jumping 5.37% to $106.59 a barrel and U.S. West Texas Intermediate rising 4.51% to $104.64. Analysts warned that Trump's escalation rhetoric could further disrupt energy infrastructure in the Gulf, prolonging the conflict and keeping energy prices elevated. Trump claimed Iran had requested a ceasefire, a claim Tehran denied, and stated the U.S. would consider it only once the Strait of Hormuz is 'open, free, and clear.' The deployment of a third aircraft carrier, the USS George H.W. Bush, to the region has raised doubts about the likelihood of a swift resolution. Markets had briefly rallied earlier in the week after Trump suggested the U.S. could leave Iran without securing the Strait of Hormuz, but the renewed military buildup has dampened optimism. 'It's not over until it's over,' said Nomura's APAC Equity Strategist Chetan Seth, noting that risk assets remain vulnerable to further geopolitical shocks. The uncertainty has left investors bracing for prolonged volatility as the situation in the Middle East remains fluid.