Market sentiment across the Asia-Pacific region soured on Monday as investors reacted to escalating geopolitical rhetoric regarding Iran. President Donald Trump issued a stern warning to Tehran on Sunday via social media, declaring that the “clock is ticking” and suggesting severe consequences if unspecified demands are not met. This development has reignited widespread anxiety concerning potential disruptions to global energy supplies in the Middle East.

Energy markets responded immediately to the heightened uncertainty, with oil prices climbing by more than 1%. International benchmark Brent crude futures for July rose 1.34% to reach $110.72 per barrel, while U.S. West Texas Intermediate futures for June saw a 1.75% increase to $107.26 per barrel. The potential for further conflict in the region, particularly regarding the continued closure of the Strait of Hormuz, remains a primary concern for traders monitoring supply chain vulnerabilities.

Equities across the region faced downward pressure, with Australia’s S&P/ASX 200 falling 0.76% and South Korea’s Kospi dropping more than 2%. Japan’s Nikkei 225 also saw a modest decline, while government bond yields in Japan spiked by over 8 basis points to 2.785% amid broader concerns over global inflation. These movements follow a challenging week for U.S. markets, where technology stocks faced significant profit-taking and major indices closed lower on Friday.

As U.S. stock futures remain relatively flat, investors are shifting their focus toward upcoming quarterly earnings reports from major retail corporations and industry leaders like Nvidia. The recent cooling in the technology sector, which saw notable pullbacks in shares of Intel, Advanced Micro Devices, and Micron Technology, continues to weigh on investor confidence as the market navigates a complex landscape of geopolitical risk and shifting monetary policy expectations.