Markets wobble amid rising Middle East tensions, while investors brace for key US economic data….
Equity markets delivered a mixed performance on Friday as oil prices climbed sharply after US President Donald Trump signalled that Washington could consider military action against Iran if ongoing nuclear negotiations collapse.
The comments injected fresh uncertainty into global markets that had only just begun to stabilise following this month’s AI-driven sell-off. Traders, already on edge, now find themselves weighing geopolitical risk alongside crucial US economic data due later in the day.
Speaking at the inaugural gathering of his “Board of Peace” initiative aimed at stabilising Gaza Trump warned Tehran to strike what he described as a “meaningful deal.” Without one, he cautioned, “bad things happen,” adding that the United States may need to “take it a step further” if diplomacy stalls. He suggested developments could unfold within the next 10 days.
The rhetoric came as the US reportedly bolstered its military footprint in the region, deploying warships and fighter aircraft, a move widely interpreted as strategic leverage rather than an immediate prelude to conflict.
Israeli Prime Minister Benjamin Netanyahu amplified the pressure, warning that any attack by Iran would provoke a response “they cannot even imagine.”
The tensions follow a second round of Omani-mediated talks between Washington and Tehran held in Geneva earlier this week. The negotiations are part of broader efforts to prevent Iran from acquiring nuclear weapons, an ambition Tehran continues to deny.
Oil at Highest Since June
The possibility of disruption in the oil-rich Middle East has propelled crude prices to their strongest levels in months.
- West Texas Intermediate rose 0.3 percent to $66.65 per barrel
- Brent crude gained 0.2 percent to $71.80 per barrel
Both benchmarks are now hovering at highs not seen since June, reflecting heightened supply risk premiums.
Asian Markets Slip, Europe Opens Firmer
Across Asia, sentiment remained fragile.
Tokyo’s Nikkei 225 dropped 1.1 percent, while Hong Kong’s Hang Seng Index fell by the same margin as it reopened from a three-day holiday. Sydney, Wellington and Bangkok also closed lower.
In contrast, Seoul extended its rally to a fresh record, buoyed by sustained technology-sector buying. Singapore, Manila and Mumbai also edged higher.
European markets struck a more optimistic tone at the open. London’s FTSE 100 climbed 0.3 percent, with Paris and Frankfurt likewise advancing.
On Wall Street, the Dow Jones Industrial Average ended Thursday down 0.5 percent at 49,395.16.
Diplomacy Still in Play
Despite the sharp language, some analysts urged caution in interpreting the developments as an inevitable march toward war.
City Index analyst Matt Simpson noted that Washington’s actions appear to combine military readiness with continued diplomatic engagement — a signal that leverage, rather than immediate escalation, may be the primary objective. The fact that talks remain ongoing suggests both sides are still exploring a negotiated exit before positions harden further.
Trade Deal Fails to Lift Jakarta
Meanwhile, in Southeast Asia, shares in Jakarta slipped even after Trump and Indonesian President Prabowo Subianto finalised a long-running trade agreement.
The deal sets a 19 percent tariff on Indonesian exports to the United States lower than the previously threatened 32 percent levy. In return, Jakarta committed to $33 billion in purchases of US energy products, agricultural goods and aviation equipment, including Boeing aircraft.
Investors Await Fresh US Data
Markets are also bracing for the release of new US economic data later Friday. A string of stronger-than-expected indicators this week has boosted confidence in the resilience of the world’s largest economy — but it has also dampened expectations for aggressive interest rate cuts in the near term.
For now, investors are navigating a delicate balance: solid economic fundamentals on one side, and the risk of geopolitical escalation on the other. With oil climbing and diplomacy hanging in the balance, the coming days could prove decisive for markets worldwide.
