Oil prices soar, Trump threatens to escalate the situation, South Korea and Japan lead the decline in Asian stocks.

After US President Trump hinted that the situation in the Middle East may escalate, the rebound in global stock markets was dashed. He declared that the US will launch a "very severe" strike against Iran in the next two to three weeks. The market's optimistic mood that the conflict is likely to end quickly was impacted by Trump's speech, with the MSCI Asia-Pacific index falling by 1.6%. South Korea and Japan led the decline in regional stock indices, with the Kospi index dropping by more than 4% at one point, and the Nikkei 225 index falling by nearly 2%. S&P 500 index futures and Euro Stoxx 50 index futures both fell by over 1%. "Trump's speech did not include the content that the market was expecting, namely signs that the conflict is about to end," said Jumpei Tanaka, head of investment strategy at Pictet Asset Management Japan. "Instead, he hinted that the situation may escalate further, which is clearly bearish for the stock market." Oil prices surged, with Brent crude futures soaring by over 5% to over $106 per barrel. Precious metal prices fell, with spot gold falling by over 1.5% and silver falling by over 3%. Most LME industrial metals also fell. The US dollar strengthened, further solidifying its position as the preferred safe haven asset during times of war. Most US bonds fell, with the benchmark 10-year yield rising by over 3 basis points. G-10 currencies all fell against the US dollar. Prior to Trump's speech, investors had believed that the US would reduce its military actions against Iran, as Trump had previously stated that he expected the US to end its war with Iran within two to three weeks. However, the change in tone of this speech extinguished hopes of a quick resolution to the conflict.