Global Markets Volatile as US-Iran Naval Tensions Threaten Oil Chokepoint

Asian equity markets displayed a fragmented performance on Friday, caught between regional economic data and escalating geopolitical friction in the Middle East. The primary driver of instability is the contested control of the Strait of Hormuz, where tensions between the United States and Iran have reached a critical flashpoint. The situation intensified following reports of Iranian commandos storming a cargo ship and the activation of defense systems in Tehran. In response, President Trump issued a directive to the US Navy to use lethal force against vessels deploying mines in the strait, while US forces boarded an Iranian oil supertanker in the Indian Ocean. These developments have pushed Brent crude prices above $105 per barrel, sparking renewed fears of inflationary pressure and potential disruptions to global energy supplies. In Asia, the Nikkei 225 surged 0.97% to 59,716.18, reaching a new record high after core inflation fell below the Bank of Japan's 2% target for the second consecutive month. Conversely, China's Shanghai Composite dropped 0.33% to 4,079.90, with computing power stocks retreating. Other regional indices, including the Kospi and S&P/ASX 200, ended largely flat or slightly lower as investors weighed geopolitical risks against corporate earnings. Overnight, US markets retreated from record highs, with the Nasdaq Composite falling 0.9% and the S&P 500 and Dow both dipping 0.4%. While Intel reported strong earnings, disappointing guidance from IBM, Honeywell, and American Airlines added to the bearish sentiment. Gold prices saw a slight decline, slipping below $4,700 an ounce, as the US dollar index trended toward its first weekly gain in three weeks.