Asian shares, US futures retreat and oil prices surge after US strike on Iranian rocket launchers

Currency traders in Seoul, South Korea reported on August 31, 2026 that Asian shares were mostly lower and U.S. futures declined due to expectations of a potential interest rate hike by the Federal Reserve in the near future. Meanwhile, oil prices surged by approximately 3% following the U.S. military action against Iranian rocket launchers in the Strait of Hormuz. This marks the first military action by the U.S. in a month.

The Trump administration had recently shifted its focus towards economic pressure, and a return to open conflict in the region would pose risks for the area. Brent crude, the international benchmark, increased by 2.9% to $90.61 per barrel, while U.S. benchmark crude oil rose by 2.7% to $85.66 per barrel.

Stephen Innes from SPI Asset Management commented that the Middle East had become relatively quiet, allowing oil traders to remove some of the war premium from crude prices. However, the upcoming Sunday witnessed a reminder that quiet in the Strait of Hormuz does not imply peace. Market sentiment in Asia took a hit after a speech by Fed Chairman Kevin Warsh on Friday, which further reinforced the expectation of the U.S. central bank taking necessary actions, including potential interest rate hikes, to control inflation and bring economic stability.

In Tokyo, the Nikkei 225 fell by 0.4% to 66,164.66, while the Kospi in South Korea dropped by 0.5% to 6,757.67. Hong Kong's Hang Seng Index declined by 0.4% to 25,479.52, whereas the Shanghai Composite Index increased by 0.4% to 3,967.94. Shein, the e-commerce and fast fashion giant, is scheduled to commence trading in Hong Kong on Tuesday, marking its biggest initial public offering this year in Chinese markets.