Equities were mixed and oil prices rose on Friday after Donald Trump escalated Middle East tensions by hinting at possible military strikes on Iran if it failed to reach a “meaningful deal” in nuclear talks.
The remarks unsettled investors and dampened a tentative rebound in global markets following an AI-driven sell-off earlier this month. Traders are also awaiting fresh US economic data later in the day, which could offer new insight into the health of the world’s largest economy.
Recent forecast-beating data has improved confidence in the US outlook, but it has also tempered expectations of further interest rate cuts.
Speaking at the inaugural meeting of his “Board of Peace” initiative aimed at stabilising Gaza, Trump warned that Tehran must agree to a deal.
“It’s proven to be over the years not easy to make a meaningful deal with Iran. We have to make a meaningful deal otherwise bad things happen,” he said, as the US deployed warships, fighter jets and other military assets to the region.
He added that Washington “may have to take it a step further” without an agreement, saying developments could unfold within the next 10 days.
Earlier, Israeli Prime Minister Benjamin Netanyahu warned that Iran would face consequences if it launched an attack.
The heightened rhetoric comes days after the United States and Iran held a second round of Omani-mediated talks in Geneva aimed at curbing Tehran’s nuclear programme, which Iran insists is for peaceful purposes.
Concerns over potential disruption in the crude-rich Middle East have pushed oil prices to their highest levels since June, extending gains into Friday’s trading session.
In Asia, Hong Kong shares fell as the market reopened after a three-day break. Tokyo, Sydney, Wellington and Bangkok also closed lower. However, Seoul climbed to a fresh record on the back of strong tech buying, while Singapore, Manila and Mumbai posted gains.
European markets opened firmer, with London, Paris and Frankfurt trading higher in early deals.
Matt Simpson, a market analyst at City Index, suggested that immediate conflict was not guaranteed.
“At its core, this looks like pressure and leverage rather than a prelude to invasion,” he said.
He added that while military deployments have dominated headlines, ongoing diplomacy indicates both sides may still seek a negotiated outcome.
Meanwhile, shares in Jakarta slipped even after Trump and Indonesian President Prabowo Subianto finalised a trade deal following months of negotiations.
The agreement sets a 19 percent tariff on Indonesian goods entering the United States, down from a previously threatened 32 percent levy. Jakarta also committed to $33 billion in purchases of US energy products, agricultural goods and aviation-related items, including aircraft from Boeing.
Investors remain cautious as geopolitical risks and economic data shape the next direction for global markets.
