Asian shares retreated on Thursday following declines on Wall Street that snapped a nine-day winning streak for the S&P 500.
Oil prices fell back after Israel and Lebanon said they agreed to renew their fragile ceasefire and create a number of “pilot” security zones inside Lebanon from which Hezbollah militants would be banned.
Crude had surged Wednesday when both the United States and Iran said they launched retaliations for earlier attacks or attempted ones.
Early Thursday in Asia, Brent crude was trading 92 cents lower at $96.89 per barrel, while benchmark U.S. crude oil shed 83 cents to $95.19 per barrel.
In share trading, Japan’s Nikkei 225 shed 1.4% to 67,470.69 on selling of technology stocks. Energy and technology giant SoftBank Group slumped 11.2%, while Shin-Etsu Chemical dropped 3.8%.
Hong Kong’s Hang Seng lost 1.6% to 25,234.24, and the Shanghai Composite index fell 0.8% to 4,052.89.
In South Korea, the Kospi sank 1.8% to 8,639.41, while Australia’s S&P/ASX 200 declined 1.2% to 8,680.80.
On Wednesday, the S&P 500 fell 0.7% from its all-time high for its first drop in 10 days, closing at 7,553.68. The Dow Jones Industrial Average dropped 1.2% to 50,687.07, while the Nasdaq composite sank 0.9% to 26,853.98.
Palo Alto Networks helped drag the market lower, and it fell 5.6% even though it reported profit for the latest quarter that topped analysts’ expectations.
Stocks also felt pressure from higher yields in the bond market, which climbed with the price of oil. The yield on the 10-year Treasury rose to 4.49% from 4.46% late Tuesday and from just 3.97% before the war began.
High yields worldwide are threatening to slow economies and undercut prices for stocks and all kinds of other investments. They have already forced the average long-term U.S. mortgage rate to its most expensive level in nine months, and they could curtail companies’ borrowing to build the artificial-intelligence data centers that have supported the U.S. economy’s growth recently.
More expensive loans can hurt smaller companies in particular because many need to borrow to grow. The Russell 2000 index of the smallest U.S. stocks fell 1.3%, more than the rest of the market.
Still, stocks remain near their records, even with all the pressure on the global economy created by higher inflation.
Oil prices remain below their peaks from earlier in the war with Iran, and hope seems to be remaining on Wall Street that the United States and Iran will ultimately agree to reopen the Strait of Hormuz to oil tankers. That would improve the global flow of crude and hopefully lower its price.
Lawmakers in the U.S. House for the first time Wednesday approved a war powers resolution that would halt the U.S. military action against Iran, defying President Donald Trump as a handful of Republicans joined with Democrats to try to end the three-month-long conflict that has reordered politics at home and abroad and roiled world markets.
GameStop rose 6% after the video-game retailer said its revenue in the latest quarter grew 14% from a year earlier. It also announced a program to send up to $2 billion to its investors by buying back its own stock.
Macy’s added 0.6% after swinging between gains and losses through the day. The retailer reported profit for the latest quarter that blew past analysts’ forecasts, while saying an overhaul of its merchandise and better customer service is resonating with customers.
Reports released Wednesday on the U.S. economy were mixed. One from the Institute for Supply Management said growth accelerated more last month for U.S. construction, agricultural and other services businesses than economists expected.
The survey also showed businesses are feeling the pinch of higher prices caused by tariffs and more expensive oil.
Thursday will bring U.S. employment data.
In other dealings early Thursday, the U.S. dollar fell to 159.84 Japanese yen from 160.08 yen late Wednesday. The euro rose to $1.1616 from $1.1600.
