Asian shares faltered on Thursday as fresh U.S. military strikes in Iran and Kuwaiti reports of missile attacks dampened hopes for peace. Oil prices jumped 2% on escalating tensions.
The U.S. military struck Iranian drone operations threatening forces and shipping in the Strait of Hormuz, a key waterway. Insurance costs have become prohibitive, and Iran's toll plans remain unclear.
CBA analyst Madison Cartwright gave a 70% probability of a ceasefire deal but warned the strait's fate is uncertain. Brent crude rose 2.1% to $96.31, U.S. crude up 2.3% to $90.68.
Treasury yields edged higher, with 10-year notes at 4.512%. Japan's Nikkei flatlined, South Korea fell 1.2%, and MSCI Asia ex-Japan lost 0.7%. European futures also dipped.
Focus now shifts to U.S. PCE inflation data, expected to hit a three-year high. Fed faces two-sided risks amid inflation and growth uncertainty. Markets price a 50-50 chance of a rate hike by year-end.
Dollar index steady at 99.352, dollar hit four-week high on yen at 159.57. Euro fell 0.1% to $1.1613. Gold slid 1.3% to $4,395.
