Asia-Pacific Stocks Mixed After U.S.-Iran Ceasefire

Asia-Pacific markets mostly traded lower Friday as concerns grew over renewed hostilities between Iran and the U.S. after the two sides traded fire in the Strait of Hormuz, with each side claiming the other initiated the attack. Oil prices rose on the news.

West Texas Intermediate futures for June climbed 0.41 percent to $95.2 per barrel while Brent crude futures for July gained 0.81 percent to $100.87 per barrel as of early Friday trading. South Korea's benchmark index reversed an earlier loss of 1.82 percent to finish at a fresh record high of 7,498 points, up 0.11 percent.

The small-cap Kosdaq added 0.71 percent to close at 1,207.72. Local currency weakened sharply against the U.S. dollar. Japan's Nikkei 225 slipped 0.19 percent to 62,713.65 amid profit-taking after setting a record high the previous day. Australia's S&P/ASX 200 fell 1.51 percent to 8,744.40 while mainland China's CSI 300 index declined 0.58 percent to 4,871.91.

Hong Kong's Hang Seng index was down 0.85 percent in late afternoon trading and India's Nifty 50 lost 0.67 percent. U.S. stock futures pointed to a slightly lower open. S&P 500 futures and Nasdaq 100 futures were down less than 0.1 percent while futures tied to the Dow Jones Industrial Average fell about 12 points.

The latest flare-up occurred as American forces escorted Navy destroyers through the Strait of Hormuz. U.S. Central Command said American forces intercepted unprovoked Iranian attacks that included small boats and drones. Both sides accused the other of starting the exchange of fire.

The incident raised immediate questions about a fragile ceasefire that had been in place to end a 10-week war in the Middle East. President Donald Trump insisted the ceasefire remains in effect. He described the strikes as "just a love tap" in comments to an ABC News reporter on Thursday.

“Just like we knocked them out again today, we'll knock them out a lot harder, and a lot more violently, in the future, if they don't get their Deal signed, FAST!”

Trump later wrote on Truth Social that the U.S. "completely destroyed" the Iranian vessels and drones involved, which he said dropped "ever so beautifully down to the Ocean, very much like a butterfly dropping to its grave!" He reiterated that Iran would face stronger attacks if it does not agree to a nuclear deal.

The S&P 500 pulled back from record highs on Thursday, closing down 0.38 percent at 7,337.11 after touching an intraday high. The Nasdaq Composite slipped 0.13 percent to end at 25,806.20 while the Dow Jones Industrial Average shed 313.62 points, or 0.63 percent, to settle at 49,596.97.

Losses were led by Amazon and semiconductor stocks including Broadcom and Micron Technology. Despite the decline, prediction market Polymarket showed an 87 percent probability that the S&P 500 would open higher on Friday. Toyota Motor shares fell 2.18 percent in Tokyo after the automaker reported its fourth-quarter operating profit slumped 49 percent, partly weighed down by U.S. market conditions.

The latest market moves come as investors weigh the potential for further disruption in energy markets and global trade routes if tensions escalate beyond what both sides described as limited exchanges. South Korean stocks had been on a record-breaking rally over the prior three sessions, driven by gains in artificial intelligence-related chip stocks and earlier optimism about a possible U.S.-Iran peace agreement before the overnight clash occurred.