Global markets showed mixed performance on Friday while oil prices climbed after Donald Trump signalled possible military action against Iran if nuclear negotiations fail to produce a “meaningful deal”.
The warning heightened geopolitical tensions and weighed on a fragile market recovery following this month’s AI-driven sell-off. Investors are also awaiting fresh US economic data later in the day, with recent stronger-than-expected figures boosting optimism but dampening expectations of further interest rate cuts.
Speaking at the launch of his “Board of Peace” initiative on Gaza, Trump said:
“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,” adding that US forces had deployed warships, fighter jets and other military assets to the region.
He also warned Washington “may have to take it a step further” without an agreement, saying: “You’re going to be finding out over the next probably 10 days.”
Earlier, Benjamin Netanyahu cautioned: “If the ayatollahs make a mistake and attack us, they will receive a response they cannot even imagine.”
The remarks followed a second round of Oman-mediated talks between Washington and Tehran in Geneva aimed at preventing Iran from acquiring nuclear weapons, which Tehran denies pursuing.
Fears of conflict in the oil-rich region pushed crude prices to their highest levels since June. Equity markets in Asia mostly fell, with Hong Kong, Tokyo, Sydney, Wellington and Bangkok lower, while Seoul reached a record high and Singapore, Manila and Mumbai advanced. European markets opened higher.
City Index analyst Matt Simpson said a strike was not inevitable:
“At its core, this looks like pressure and leverage rather than a prelude to invasion.”
He added that Washington was combining military readiness with stalled diplomacy, noting:
“The US is pairing military readiness with stalled nuclear negotiations, signalling it has credible strike options if talks fail. That doesn’t automatically translate into boots on the ground or a regime-change campaign.
“While military assets dominate headlines, diplomacy is still in motion. The fact talks are continuing at all suggests both sides are still probing for a diplomatic off-ramp before tensions harden further.”
Meanwhile, Indonesian stocks slipped despite a trade deal between Trump and Prabowo Subianto. The agreement sets a 19% tariff on Indonesian exports to the US, lower than a previously threatened 32%, while Jakarta committed to $33 billion in purchases of US energy, agricultural and aviation goods, including aircraft from Boeing.
