Asian markets slide as oil surge drives global stock selloff

Thursday 12 March 2026 - 11:20

By: Dakir Madiha

Asian markets slide as oil surge drives global stock selloff

Global stock markets extended their decline on March 11 and 12 as surging oil prices and renewed geopolitical tensions linked to the conflict with Iran revived fears of persistent inflation, weakening expectations for interest rate cuts and pushing investors toward safe haven assets.

On Wall Street, the Dow Jones Industrial Average fell 289 points, or 0.6 percent, closing Wednesday at 47,417.27, its lowest closing level of the year. The S&P 500 also ended the session lower, while the Nasdaq Composite managed a slight gain of 0.1 percent after strong earnings from Oracle supported technology shares.

The selloff followed another jump in crude prices. Brent futures rose 4.8 percent to around 92 dollars per barrel despite a record release of strategic oil reserves by members of the International Energy Agency. The planned release totals 400 million barrels, more than double the 182 million barrels released after Russia’s invasion of Ukraine in 2022.

However, reports that Iran had deployed naval mines in the Strait of Hormuz offset the expected market impact of the supply release, keeping energy prices elevated.

The rise in oil overshadowed the latest US inflation data. The Bureau of Labor Statistics reported that the consumer price index increased 2.4 percent year over year in February, unchanged from January and broadly in line with economists’ forecasts. Core inflation, excluding food and energy, stood at 2.5 percent annually.

Investors largely ignored the report because it reflected economic conditions before the oil shock. Crude prices had climbed from below 60 dollars per barrel in December to nearly 120 dollars at their peak on March 9 after the escalation of the conflict involving Iran.

Economists warned that the surge in energy prices will likely begin appearing in inflation data for March. Mark Zandi, chief economist at Moody’s, estimated that actual inflation may already be closer to 2.7 percent once statistical distortions linked to last autumn’s US government shutdown are considered.

Bond markets also reacted. The yield on the US 10 year Treasury rose to 4.19 percent on Wednesday and moved toward 4.23 percent on Thursday as investors reassessed inflation risks. Traders scaled back expectations for Federal Reserve rate cuts, with markets now projecting fewer reductions through 2026.

Asian markets followed Wall Street lower during Thursday trading. Japan’s Nikkei 225 dropped 1.54 percent, South Korea’s Kospi declined 1.3 percent, and Hong Kong’s Hang Seng index fell 1.12 percent.

Energy stocks were the only sector showing gains during the Asian session as the broader market moved lower.

Attention now turns to the Federal Reserve’s next policy meeting scheduled for March 17 and 18. Several Fed officials have recently warned that inflation remains above target levels. Boston Federal Reserve president Susan Collins and Richmond Fed president Thomas Barkin both cautioned against premature rate cuts, while Minneapolis Fed president Neel Kashkari said policymakers will need more data before making any decisions amid ongoing geopolitical uncertainty.