BANGKOK (AP) — Shares retreated Thursday in Asia after stocks on Wall Street slumped as oil prices spiked at more than $110 a barrel.
U.S. stocks also sagged due to a report that said inflation was primed to worsen even before the war with Iran sent oil and gas prices spiking. That, and comments from the head of the Federal Reserve, led investors to expect there’s less chance of getting the lower interest rates that they love.
Tokyo’s Nikkei 225 fell
2.5% to 53,875.94 and the Kospi in South Korea lost 1.3% to 5,845.62.
In Hong Kong, the Hang Seng slipped 0.2% to 25,725.77, while the Shanghai Composite index shed 0.9% to 4,027.73.
Australia's S&P/ASX 200 lost 8,504.20 and Taiwan's Taiex fell 1.2%.
Brent crude, the international standard, was trading at $111.24 a barrel, up 3.6% from a day earlier. U.S. benchmark crude oil gained 0.8% to $96.80 a barrel.
On Wednesday, the S&P 500 fell 1.4% and flipped to a loss for the week so far. The Dow Jones Industrial Average dropped 768 points, or 1.6%, and the Nasdaq composite slid 1.5%.
The losses deepened after the Fed decided to keep its main interest rate steady, instead of resuming cuts meant to give the job market and economy a boost.
“We just don’t know,” Fed chair Jerome Powell said about what will happen with oil prices, along with how long President Donald Trump’s tariffs will take to work their way fully through the system.
Oil prices have soared because the war has disrupted the Persian Gulf’s energy industry. Iran’s state television said Wednesday that the Islamic Republic would be attacking oil and gas infrastructure in Qatar, Saudi Arabia and the United Arab Emirates after an attack on facilities associated with its offshore South Pars natural gas field.
If the disruptions keep oil and gas prices high for long, they could create a debilitating wave of inflation for the global economy.
A report released Wednesday morning showed inflation pressures were already building before the war began. It said inflation at the U.S. wholesale level unexpectedly accelerated last month to 3.4%.
