Trump’s threat to hit Iran ‘extremely hard’ jolts Asian stocks, U.S. futures and oil

The United States will hit Iran “extremely hard” in the next two or three weeks, US President Donald Trump said in his national address on Wednesday.

“We’re going to hit them extremely hard in the next two to three weeks,” he said. “We will bring them back to the stone age, where they belong.”

However, the first targets to suffer the heaviest blow from “Epic Rage”, the name given by the president to Washington’s Iran operation, were Asian stocks, US Treasury bonds and oil prices.

Shortly after his 19-minute speech, Asian markets reversed gains from Thursday’s session as benchmark indexes in Australia, Japan and South Korea fell. South Korea’s kospi It fell 4.37%, leading the losses in the region.

Hong Kong and mainland Chinese markets, which opened their sessions shortly after his speech, started the day in the negative zone.

U.S. stock futures were down more than 1% across all three major indexes after trading flat earlier in the session.

US Treasury yields climbed after Trump’s speech, signaling a sell in the bond market; The yield on benchmark 10-year bonds increased by 6 basis points to 4.38%.

In currencies US dollar index It rose 0.37% to 100.02, reversing previous losses.

japanese yen While it decreased by 0.38% against the dollar to 159.37, South Korea won It decreased by 0.6% to 1,521.80. Both currencies had strengthened at the beginning of the session.

The dollar also strengthened against other major currencies. Euro While it was traded at 1.153 level, pound It fell by 0.57 percent to 1.32 against the US dollar.

Spot gold prices It decreased by 1.82% to 4,671.67.

Oil prices saw the biggest swings after Trump’s speech; Brent crude futures rose 5.37% to $106.59 per barrel, while US West Texas Intermediate futures rose 4.51% to $104.64.

Despite Trump’s claims that the US has achieved nearly all of its goals, analysts say his threat to hit Iran “extremely hard” could still push oil prices higher.

“Trump is declaring the mission nearly accomplished, but underscoring further escalation over the next few weeks, raising the risk of broader damage to regional energy infrastructure both in Iran and across the Gulf,” Rachel Ziemba, founder of Ziemba Insights, told CNBC’s “China Connection.”

Trump in the USA early on Wednesday He claimed that Iran’s “New Regime President” had asked the United States for a ceasefire, but Tehran denied this claim.

Trump added that the United States would “consider” the request only when the Strait of Hormuz is “open, free and clear.” Real SocialIt fueled expectations that the war would last longer.

“Remember, the longer this war goes on, the longer the power outage will last. [Strait of Hormuz] “If it continues and the risk of energy prices rising increases,” said Chetan Seth, APAC Equity Strategist at Nomura. “It ain’t over ’til it’s over.”

Seth added that risk markets such as stocks are “surprisingly not disappointing,” especially after the excitement of the last few days.

Earlier this week, Trump raised hopes for an end to the conflict by signaling that the United States could leave Iran even if the Strait of Hormuz is not opened. The markets then rallied over the last two days.

“The markets reacted negatively because while Trump is saying it’s almost over, he’s sending his third aircraft carrier and more troops to the region, so it’s hard to believe his words,” Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis, told CNBC.

USA earlier this week reportedly deployed Nimitz-class aircraft carrier USS George HW Bush and its accompanying warships to the region. Washington had previously deployed the USS Abraham Lincoln and USS Gerald R. Ford aircraft carriers to the region to support its operations against Iran.

“According to me [a] “Further escalation is still a more likely scenario,” he added.