US stocks rise, Asian markets get rocked as Middle East conflict intensifies

New York
—

Oil prices Wednesday paused their recent surge, supporting a rebound in European and US stocks, as investors hold hope for limited long-term disruptions to energy markets and monitor developments in the Middle East.

Global investors are digesting the market turmoil spurred by the US war with Iran and subsequent conflict across the region. Asian stocks sank Wednesday, while European and US stocks steadied after two days of intense volatility.

South Korea and Japan rely on imports of liquified natural gas from the Middle East, leaving their economies and market particularly exposed to the ongoing turmoil.

South Korea’s benchmark Kospi index plunged 12%. The index had dropped 7.24% Tuesday, putting it on the precipice of a technical bear market.

Despite the plunge, the Kospi is still up nearly 21% this year. South Korea’s stock market was a top performer in 2025, surging 76% on enthusiasm about artificial intelligence and chipmakers.

“The fact that these countries are all almost entirely dependent on LNG for their supply of natural gas makes them especially vulnerable to the current halt in supply from the Middle East,” analysts at Capital Economics said in a note.

US and European stocks rebounded and oil prices moderated after the New York Times reported that Iran made indirect contact with the United States to discuss negotiations to end the conflict.

Separately, Treasury Secretary Scott Bessent on Wednesday confirmed to CNBC that the United States Navy is set to provide “safe passage” through the Strait of Hormuz for oil tankers “when it is appropriate and should it be needed,” reinforcing comments made by President Donald Trump on Tuesday that helped oil prices moderate.

“There…

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