What to know:
- Asian markets lost nearly $1 trillion in value as the escalating US-Iran conflict triggered a sharp global sell-off.
- Oil prices jumped more than 4% after Iran announced the closure of the Strait of Hormuz, raising inflation and energy supply concerns.
- Rising bond yields in the US, UK, and Japan signaled expectations of persistent inflation and fewer near-term interest rate cuts.
Asian markets have experienced a huge sell-off due to escalating war between the US and Iran, which has affected global investors.
More than $1 trillion worth of market capitalization was wiped out within one day’s trading as the news about US forces striking at Iran and Iran announcing that the Strait of Hormuz is closed caused a spike in oil prices. Higher oil prices raised fears of continued high inflation.
On July 13, 2026, market analysis platform Bull Theory noted that the presence of increased tension, along with higher oil prices and higher government bond yields, indicates that the market is starting to factor in a tougher economic scenario.
It was observed that Asia faces an increased risk since nations like Japan, South Korea, and Taiwan depend largely on the crude oil that passes through the Strait of Hormuz.
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Asian Markets Hit First by Energy Supply Fears
Strait of Hormuz is one of the busiest petroleum channels globally and transports about one-fifth of the crude being exported around the world. When there is any disturbance in the channel, global oil supplies become an issue, and the price of oil goes up.
With respect to the recent trends, the price of crude oil has risen by more than 4%, which is an area of concern for business organizations and consumers because of possible increases in fuel and transportation costs. The sell-off in Asian markets was due to concerns about slowing economic growth and inflation.
Bond Yields Signal Changing Rate Expectations
This effect was felt not only on stocks but also on government bond yields. The yield of the Japanese 10-year government bond stood at 2.779%, while the yield on the UK’s 10-year government bond was at 4.915%. Meanwhile, the yield on the US 10-year Treasury was at 4.577%.
Bond yields rising typically mean that there is an expectation of sustained inflation, which decreases the probability that interest rates will be lowered by leading central banks anytime soon. Also, the reserves of the Strategic Petroleum Reserve in the US continue to be at their lowest levels in decades after being tapped for emergencies.
Asian Markets Await Next Catalyst After Global Sell-Off
The future trajectory of Asian markets would be dependent largely on how the conflicts between the US and Iran progress from here. Should there be any disruption in the shipping of oil from the Strait of Hormuz, this is likely to raise the price of oil, thus adding to inflation.
The investor will also be paying attention to future inflation reports and meetings of central banks for indications on future monetary policy moves. In light of geopolitics, oil prices, yields, and Asian markets will remain extremely vulnerable to any news out of the Middle East.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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