Asian shares and U.S. futures declined Monday as markets braced for potential interest rate hikes by the U.S. Federal Reserve. Concurrently, oil prices surged approximately 3% following U.S. forces striking Iranian rocket launchers on the Strait of Hormuz, marking the first military action in the region in a month.

Brent crude rose 2.9% to $90.61 per barrel, and U.S. benchmark crude oil increased 2.7% to $85.66 per barrel. Analysts noted that the recent quiet in the Strait of Hormuz was being eroded, raising concerns about regional stability and its impact on oil prices.

The market downturn in Asia followed a speech Friday by Federal Reserve Chairman Kevin Warsh, which reinforced expectations that the central bank may raise rates to combat inflation, even if it causes short-term economic pain. U.S. stock futures reflected this sentiment, with the S&P 500 and Dow Jones Industrial Average futures slipping 0.3%.

In Tokyo, the Nikkei 225 lost 0.4%, while South Korea's Kospi declined 0.5%. Hong Kong's Hang Seng fell 0.4%, although Shanghai's Composite index saw a modest gain of 0.4%. Elsewhere in the region, Australia's S&P/ASX 200 dropped 0.2%, Taiwan's Taiex fell 0.4%, and India's Sensex slipped 0.6%.

The Federal Reserve's monetary policy outlook significantly influenced bond markets. The yield on the two-year Treasury, a key indicator for expected Fed moves, jumped to 4.35% from 4.22% after Warsh's speech at an economic symposium in Jackson Hole, Wyoming. Longer-term yields also increased, with the 10-year Treasury yield climbing to 4.72% and the 30-year Treasury yield reaching 5.21%.

Warsh emphasized the Fed's commitment to bringing inflation down to its 2% target, reiterating that short-term interest rates are the primary tool for managing inflation and maintaining a strong job market. U.S. President Donald Trump has previously expressed a preference for lower interest rates.

In currency markets, the U.S. dollar weakened against the Japanese yen, falling to 159.85 yen from 160.10 yen. The euro saw a slight increase, moving to $1.1588 from $1.1580.