Asian equity markets posted solid gains Friday as investors navigated continued uncertainty surrounding the Iran war and elevated oil prices that have disrupted global energy markets since late February. Tokyo's Nikkei 225 surged 2.7% to 63,339.07, while U.S. futures edged higher following modest Wall Street gains.
Oil prices remained elevated over disruptions around the Strait of Hormuz, a critical waterway for oil and gas transit, with shipping activities still well below levels before the Iran war began in late February. Brent crude, the international standard, gained 2.3% to $104.97 a barrel, up dramatically from around $70 per barrel in February before the war's start. Benchmark U.S. crude traded 1.8% higher at $98.10 a barrel.
Market Performance Across Asia
South Korea's Kospi gained 0.4% to 7,847.71, while Hong Kong's Hang Seng picked up 0.9% to 25,612.40. The Shanghai Composite index climbed 0.9% to 4,112.90, and Australia's S&P/ASX 200 gained 0.4% to 8,657.00. Taiwan's Taiex closed 2.2% higher, while India's Sensex rose 0.6%.
A report showed inflation hitting a four-year low in April, at 1.4%, despite higher prices for oil and gas due to the war. The inflation data provided some relief to investors concerned about broader economic pressures stemming from energy market disruptions.
Congressional Stalemate on War Powers
Talks between the U.S. and Iran have dragged on, adding to uncertainty in global markets. Republicans in Congress delayed into June planned votes on dismissing legislation that would compel President Donald Trump to withdraw from the war. The House had scheduled a Thursday vote on a war powers resolution brought by Democrats that would rein in Trump's military campaign. But as it became clear that Republicans would not have the numbers to defeat the bill, GOP leaders declined to hold a vote on it.
"Markets are still searching for signs of progress in a potential deal between the US and Iran," ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note on Friday. "While there are signs of optimism, uncertainty reigns."
Wall Street and Corporate Earnings
Wall Street gained on Thursday, with the benchmark S&P 500 adding 0.2% to 7,445.72. The Dow Jones Industrial Average climbed 0.6% to 50,285.66, while the technology-heavy Nasdaq composite edged up 0.1% to 26,293.10.
Shares of Nvidia fell 1.8% despite better-than-expected quarterly results on the artificial intelligence frenzy, with some analysts believing its share price still as undervalued. Southwest Airlines gained 2.7% and American Airlines climbed 4.9% as oil prices eased before bouncing back. Ralph Lauren surged 13.9% following stronger-than-expected quarterly results.
In other dealings early Friday, the yield on the U.S. 10-year Treasury was at 4.57%, down from more than 4.67% earlier in the week, when higher global inflationary pressures stemming from the war fueled a surge in bond yields. The U.S. dollar rose to 159.12 Japanese yen from 158.98 yen. The euro was trading at $1.1605, down from $1.1619.
Why This Matters:
The near 50% surge in oil prices since late February represents a significant cost to consumers and businesses globally, threatening to undermine the low inflation environment that had prevailed through April. The disruption to shipping through the Strait of Hormuz—a critical artery for global energy markets—demonstrates the vulnerability of market-based energy supply chains to geopolitical instability. Congressional gridlock over war powers reflects deeper institutional questions about executive authority and fiscal responsibility in military engagements whose costs continue mounting. For investors, the combination of elevated energy prices, bond market volatility, and geopolitical uncertainty creates a challenging environment for capital allocation, even as corporate earnings from companies like Ralph Lauren suggest underlying economic resilience. The delayed congressional action extends market uncertainty into June, leaving businesses and consumers without clarity on energy price trajectories.