Global financial markets experienced a significant downturn Wednesday, with Asian shares tumbling and Wall Street stocks declining as a global bond sell-off deepened. U.S. stock futures also showed a downward trend.

In Asia, Tokyo's Nikkei 225 index dropped 3%, and South Korea's Kospi lost 3.6%. Hong Kong's Hang Seng and Shanghai's Composite index both dipped, while Australia's S&P/ASX 200 fell 1.1%.

On Tuesday, the S&P 500 index in the U.S. slipped 0.7%, the Dow Jones Industrial Average fell 0.8%, and the Nasdaq composite declined 1%. U.S. markets were reacting to data released Tuesday showing a slight increase in job openings for July.

Oil Prices Surge Amid Middle East Tensions

Oil prices advanced, with Brent crude trading 1% higher at $95.56 per barrel and benchmark U.S. crude up 0.7% at $90.88 a barrel. This rise follows a new round of U.S. military strikes on Iran and subsequent missile and drone attacks by Iran across the region. Escalating tensions between the U.S. and Iran, now six months into the conflict, have intensified concerns over energy supplies, particularly with the Strait of Hormuz, a critical oil transport waterway, remaining largely closed. Before the conflict began in late February, Brent crude was trading around $72 a barrel.

Bond Market Sell-Off and Rising Yields

The global bond sell-off continued, driving bond yields higher. Investors are demanding increased returns due to perceived risks associated with elevated inflation and growing U.S. government debt. The yield on the 10-year U.S. Treasury rose to approximately 4.80% from 4.75% on Monday, a significant increase from its low of 4.20% in January. The 2-year Treasury yield, closely tracking Federal Reserve interest rate movements, was around 4.40%, up from 4.34% on Monday and substantially higher than roughly 3.50% in early 2026.

Japan's 10-year government bond yield reached its highest level since 1996, trading at around 3.02% early Wednesday, an increase from 2.94% on Monday.

The U.S. dollar strengthened against the Japanese yen, rising to 160.27 from 160.17, while the euro weakened to $1.1578 from $1.1593.