Asian stocks fall as oil price surge stokes inflation fears
Global benchmark Brent climbs as high as US$101.94 after Iran says it is ready for more intense war
Published Thu, Sep 10, 2026 · 10:03 AM — Updated Thu, Sep 10, 2026 · 12:48 PM
ASIAN stocks fell, following losses in their US peers, as surging oil prices added to concern that inflation will accelerate and lead to higher global interest rates. Brent crude held above US$101 a barrel.
The MSCI Asia Pacific Index slipped 0.8 per cent, with benchmark gauges in Japan, South Korea, Taiwan and Australia all declining.
The S&P 500 Index closed down 0.5 per cent on Wednesday (Sep 9), while the Nasdaq 100 Index dropped 0.3 per cent, weighed by losses in Nvidia, Amazon and Alphabet.
Global benchmark Brent climbed as high as US$101.94 before paring gains, after Iran vowed it was prepared for a more intense war after hostilities flared across the Middle East.
At the same time, the Treasury 10-year yield held near Wednesday’s high of 4.85 per cent, a level last seen in late 2023, as the US government’s plan to buy up to US$6 billion of longer-dated debt disappointed some investors who had expected a larger increase.
The combination of higher oil prices and rising bond yields leaves markets particularly sensitive to Friday’s US inflation report, which may determine whether the US Federal Reserve raises interest rates when it meets next week.
A stronger-than-expected reading may reinforce bets on further tightening and put additional pressure on stocks and bonds, while softer data could damp those expectations.
“The longer elevated prices persist, the harder it becomes for markets to shrug off the inflation impulse,” said Evelyne Gomez-Liechti, a multi-asset strategist at Mizuho International.
Iran has no intention of backing down in the face of a US naval blockade and attacks on its oil tankers, according to a senior official from the Islamic Republic who asked not to be identified discussing sensitive matters.
Economic pain may be increasing, the official said, but the country’s leaders see the war with the US as posing an existential threat that leaves them little choice but to keep fighting.
“The temperature just got turned up again,” said Kenny Polcari at SlateStone Wealth. “The risk premium is alive and well, and the risk to energy supplies coming out of the Gulf is real.”
Elsewhere, the US dollar held near a four-month low as traders awaited a series of economic reports for clues on whether the Fed will raise rates this September.
The Bloomberg Dollar Spot Index slipped 0.1 per cent after falling to its lowest since early May on Wednesday.
The yen strengthened 0.1 per cent to 153.50 per US dollar after Bank of Japan board member Kazuyuki Masu said the central bank will continue to raise its benchmark interest rate to ensure that the price trend does not exceed 2 per cent.
Gold climbed 0.4 per cent to US$4,417 an ounce.
Markets largely shrugged off US President Donald Trump’s promise to give all adult US citizens a US$5,000 dividend if Republicans retain control of both houses of Congress.
“Trump’s US$5,000 may grab headlines, but the market’s real focus right now is on how the US Treasury buyback performs later today and what US consumer price index has in store for markets tomorrow,” said Prashant Newnaha, a senior Asia-Pacific rates strategist at TD Securities in Singapore.
The US Bureau of Labor Statistics will release August producer price data on Thursday, followed by the CPI numbers on Friday.
Swaps imply about a 62 per cent chance the Fed will raise rates by a quarter point at its Sep 15 to 16 meeting, up from 60 per cent odds on Tuesday. At least two rate hikes by the middle of 2027 are fully priced in.
“A hot CPI print would all but seal a September hike and underpin a firmer US dollar,” said Elias Haddad at Brown Brothers Harriman & Co.
“A cooler reading would strengthen the case for a hold and leave the US dollar vulnerable to a dovish Fed repricing.” BLOOMBERG
