Key TakeawaysEuropean stocks rebounded Wednesday while US futures were flat as investors braced for fresh developments from the Middle East.Asian stocks extended declines in Wednesday’s session, with South Korean stocks marking their worst day since 2008.Oil prices eased recent sharp gains, after the Trump administration said it would provide assistance to resume energy shipments through the Strait of Hormuz, without providing specific details.
European stocks bounced on Wednesday, paring the week’s declines to 3.6% and remaining on track for their worst one-week performance since last April’s tariff scare.
“The market action yesterday afternoon and this morning shows a dialing down of market anxiety, but participants will continue to be highly reactive to news flow. Markets seem to have found a level that they are happy to sit at in a wait-and-see mode for now,” James Klempster, deputy head of Liontrust’s multi-asset team, says.
Asian markets extended a global sell-off Wednesday, with South Korean stocks plunging as risk-off sentiment continued to weigh on trading amid the escalating Iran war, even as crude oil and natural gas prices remained broadly at Tuesday’s elevated levels.
The Morningstar Korea Index shed more than 12% to record its worst day since 2008 in dollar terms, with the Korea Exchange at one stage halting trading to stem selling, particularly in tech heavyweights like Samsung Electronics 005930, SK Hynix 000660 and LG 066570. Its losses for the week to date are nearly 21%. The broader Morningstar Asia Index fell 3% as other regional markets shifted lower, chiefly in Japan and Hong Kong, as investors assessed the impact of rising oil prices on major oil-importing economies.
Energy Prices Tick Higher
Energy prices moderated on Wednesday, after President Donald Trump said Tuesday that the US would provide assistance to tankers in the Strait of Hormuz, including risk insurance, without providing specific details.
Shipments through the critical maritime gateway had come to an effective halt since the weekend, after Iran threatened to target ships using the route and insurance premiums spiked to punitive highs.
Brent crude oil was up 1% at USD 82 in early afternoon trading, slowing a surge in prior sessions, while WTI crude rose ticked down marginally to USD 74.
Spanish Stocks Unfazed After Drastic Trade Threat from Trump
Spanish equities traded in line with broader European peers after President Trump threatened to cut off all trade with the country after Spain refused to allow US forces to use its bases for strikes on Iran.
The Morningstar Spain Index was up 1.4% by midday, with infrastructure group Acciona ANA and IT firm Indra IDR among top performers.
Morningstar European markets strategist Michael Field says Wednesday’s bounce suggests that investors were digesting the latest developments and seeking opportunities amid the broader slump.
“Up to now, the market has been rushing to reprice markets on the basis of the increased risk stemming from the conflict. Today however marks the point where investors are realizing that some sectors and stocks have fallen too much, and the opportunities that have presented themselves are worth buying into,” he says.
“That’s not to say that every sector is benefiting from the rally. Shipping and banks, for instance, are down materially today. It’s also not to suggest that we’ve turned a corner and that the only way is up. With the conflict escalating, its likely that markets could resume falling in the coming days as the bad news is fully digested,” Field adds.
US futures, meanwhile, pointed to a broadly neutral open after a volatile session Tuesday, which saw the S&P 500 erase all of its 2026 gains. Futures tied to the S&P 500 and Nasdaq 100 indexes each dipped around 0.1% ahead of the regular market open.
Korea’s Selloff Follows a Breakneck Rally
Korea’s Kospi had risen sharply over the past year, rallying 75% in 2025 to become the year’s top performing regional benchmark, as investors piled into semiconductor giants amid the AI buildout.
However, analysts note that the index’s heavy concentration of tech names – and their reliance on energy – had made it a major casualty of shifting investor appetite.
“We believe that the drop in share prices is partly driven by profit taking after a strong runup amidst a risk-off environment but also implies growing concern that the AI datacenter adoption pace might slow due to its significantly higher energy costs than regular data centers,” says Lorraine Tan, Asia director of equity research at Morningstar.
Korea is a major oil-importing nation, and alongside Japan and several other regional neighbors, it is heavily dependent on supplies from the Middle East. Any prolonged disruption to the Gulf’s energy exports would serve a serious blow to Seoul, and the country’s wider manufacturing-heavy economy.
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