Stocks fall further as oil spike fans fresh inflation worries

Stocks fall further as oil spike fans fresh inflation worries Estelle.Bronkhorst Thu, 10/08/2026 - 05:59

HONG KONG - Equities extended losses on Thursday as inflation fears were stoked by a fresh jump in oil prices following a report that said US President Donald Trump was considering more Iran strikes ahead of next month's US midterm elections.

The selling tracked a retreat on Wall Street, where tech firms pulled back from recent gains, having weathered concerns over spiking borrowing costs and geopolitical uncertainty.

Crude had started the week on the back foot thanks to signs that exports from the Middle East were heading back towards pre-war levels and that G7 nations had agreed to tap their stockpiles.

But anxiety returned as figures showed Tehran had increased strikes on tankers in the Strait of Hormuz, Houthis rebutted claims they had lost key territory and top oil officials warned that global reserves were running worryingly low.

And on Wednesday, The Atlantic reported that the White House had asked the Pentagon to draw up options to hit sites in Iran ahead of the midterms, with Trump's Republicans in danger of losing both houses of Congress.

The article said the size and targets were still being discussed, but added that a wider operation could be in the works after the polls on November 3.

It added that even its proponents did not think the attacks would bring Tehran to talks or see Hormuz reopened, but hoped they would show strength leading into the vote.

Both main crude contracts rose more than one percent Thursday, with supplies also hit by the loss of more than 500,000 barrels of Gulf of Mexico output owing to producers shutting up shop as Tropical Storm Isaias approaches.

News that International Energy Agency members were ready to tap more oil from reserves did little to assuage worried traders.

The spike in oil prices fanned inflation fears again and put fresh upward pressure on government bond yields to multi-year highs.

After all three main indexes on Wall Street dropped -- with the S&P 500 and Nasdaq off records -- Asia followed suit.

Tokyo, Hong Kong, Sydney, Singapore, Seoul, Wellington, Taipei and Manila were all well down, though Shanghai edged up as investors returned from a week-long break.

• AFP