Asian shares are mixed and oil prices rise as escalating Iran-Israel crisis hits Wall Street
HONG KONG (AP) — Asian shares were mixed and oil prices advanced Wednesday after the escalation of conflict in the Middle East hit Wall Street.
U.S. benchmark crude oil was up 24 cents at $73.51 per barrel. Brent crude, the international standard, was up 28 cents at $76.71 per barrel. Crude prices rose more than 4% on Tuesday after U.S. President Donald Trump left a Group of Seven summit in Canada early and warned that people in Iran's capital should evacuate immediately. Within about eight hours, Trump went from suggesting a nuclear deal with Iran remained 'achievable' to urging Tehran's 9.5 million residents to flee for their lives.
The fighting has driven prices for crude oil and gasoline higher because Iran is a major oil exporter and it sits on the narrow Strait of Hormuz, through which much of the world's crude passes. Past conflicts in the area have caused spikes in oil prices, though they've historically proven brief after showing that they did not disrupt the flow of oil.
Japan reported that its exports fell in May as the auto industry was hit by Trump's higher tariffs, with exports to the U.S. falling more than 11%. But Tokyo's Nikkei 225 jumped 0.7% to 38,803.10.
Hong Kong's Hang Seng dropped 1.2% to 23,695.62 while the Shanghai Composite Index retreated 0.2% to 3,380.47.
The Kospi in Seoul gained 0.6% to 2,967.89 while Australia's S&P/ASX 200 shed 0.2% to 8,528.50.
On Tuesday, U.S. stocks slumped under the weight of higher oil prices and weaker than expected retail sales in May.
The S&P 500 fell 0.8% to 5,982.72 and the Dow Jones Industrial Average dropped 0.7% to 42,215.80. The Nasdaq composite fell 0.9% to 19,521.09.
Trump raised the temperature on Israel's fight with Iran by calling for 'UNCONDITIONAL SURRENDER!' on his social media platform and saying, 'We are not going to' kill Iran's leader, 'at least for now.'
Pricier oil can help stocks of companies in the solar industry because they increase the incentive to switch to alternative energy sources. But solar stocks tumbled Tuesday on the possibility that Congress may phase out tax credits for solar, wind and other energy sources that produce fewer emissions that change the Earth's climate.
Enphase Energy dropped 24%, and First Solar fell 17.9%.
Treasury yields fell after a report said shoppers spent less last month at U.S. retailers than the month before. Solid spending has been one of the linchpins keeping the economy out of a recession, but part of May's drop may have simply been a return to more normal trends.
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The latest local business news and a lookahead to the coming week.
In April, some shoppers had rushed to buy automobiles to get ahead of Trump's tariffs.
Verve Therapeutics soared 81.5% after Eli Lilly said it would buy the company developing genetic medicines for cardiovascular disease in a $1 billion deal that could be worth up to $1.3 billion if certain conditions are met. Lilly's stock fell 2%.
All the action took place as the Federal Reserve began a two-day meeting on interest rates. The nearly unanimous expectation among traders and economists is that the Fed will make no move.
The Fed has hesitated to lower interest rates, and it's been on hold this year after cutting at the end of last year, because it's waiting to see how much Trump's tariffs will hurt the economy and raise inflation. Inflation has remained relatively tame recently, and it's near the Fed's target of 2%.
In currency trading early Wednesday, the U.S. dollar fell to 145.09 Japanese yen from 145.29 yen. The euro edged higher, to $1.1498 from $1.1480.
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