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March 12, 2026 – 00:34

(Bloomberg) — Asian stocks were set to open lower on Thursday, extending a volatile week, as rising oil prices and mounting strain in the private credit market weighed on investor sentiment.

Equity index futures for Japan and Hong Kong pointed to a weak start to trading while stocks in Australia fell over 1%. Contracts for the S&P 500 Index were down 0.9%. Oil gained for a second day as escalating rhetoric over the Iran war raised concerns over a prolonged conflict, outweighing an emergency release of crude reserves by wealthy nations.

Meanwhile, Morgan Stanley capped redemptions from one of its private credit funds, returning less than half of the capital that investors sought to cash out, adding to a wave of redemption requests in the industry.

“Despite the prospect of releasing oil reserves, continued uncertainty translates into continued upside risk for oil prices, and that translates into a Fed that will remain cautious about cutting interest rates,” said Ellen Zentner at Morgan Stanley Wealth Management.

US equities ended little changed as data Wednesday showed inflation slowed in February from a month earlier, offering some relief from price pressures before the war with Iran. But renewed concerns from the conflict – which has boosted energy costs – risk amplifying affordability worries.

Action was more acute in the bond market on Wednesday. Treasuries fell across the curve, lifting the US 10-year yield seven basis points to 4.23%. Traders now anticipate the Federal Reserve will cut rates only once this year.

The moves highlighted how investors are closely monitoring geopolitical developments. Oil price volatility is continuing to feed directly into inflation expectations, complicating the Fed’s path on interest rates.

Oil extended its advance despite the International Energy Agency agreeing to discharge 400 million barrels from emergency oil reserves, its largest-ever release. The US said it will release 172 million barrels of oil from the US Strategic Petroleum Reserve beginning next week. Japan will release 80 million barrels of oil from its strategic reserves.

President Donald Trump said the massive release of emergency oil reserves approved by the IEA would ease energy price pressures while the US seeks to “finish the job” in its campaign against Iran. Iran has told regional intermediaries that for a ceasefire, the US must guarantee neither it nor Israel will strike the country in the future, according to officials familiar with the matter.

Separately, Trump is preparing to invoke powers that would permit renewed oil production off the southern California coast. Trump said he didn’t believe Iran was laying mines in the Strait of Hormuz and repeated his suggestion the war would end soon.

Changing Path

In Asia, the yen touched its weakest level against the greenback since January on Wednesday before steadying early Thursday at around 159 per dollar. After holding policy settings steady next week, the Bank of Japan will likely raise its benchmark interest rate in April, according to more than a third of surveyed economists.

Read: BOJ Hawk Pushes for More Hikes in Response to Heating Up Prices

The S&P 500 declined 0.1% on Wednesday, while the Nasdaq 100 was flat.

“February’s inflation numbers were heading in the right direction, but then along came the conflict in the Middle East, and now the path is changing,” said Brian Jacobsen at Annex Wealth Management.

Data out Friday will likely paint a picture of more stubborn inflation. Economists see the Fed’s favored core personal consumption expenditures price index up 0.4% again in January. Compared with the same month last year, the median forecast calls for a 3.1% increase.

While investors are far more focused on how the conflict in Iran feeds into inflation over the months ahead, the latest data offers some reassurance that price pressures were not moving in the wrong direction before the recent energy shock, said Seema Shah at Principal Asset Management.

“The Fed has historically looked through energy‑driven price spikes,” she noted. “But with inflation having sat above target for almost five years, it may be harder to do so this time.”

Corporate Highlights:

Netflix Inc. will pay as much as $600 million for InterPositive, the AI moviemaking company founded by Ben Affleck, according to people familiar with the matter, making the purchase one of the biggest ever by the streaming leader. Oracle Corp. soared after reporting strong sales and issuing an outlook that suggests little letup in demand for AI computing. Nvidia Corp. will invest $2 billion in Nebius Group NV as part of a strategic partnership to develop and build AI data centers. Salesforce Inc. drew lukewarm demand for its $25 billion bond sale amid concerns over its debt-funded share buyback and worries about software companies’ AI exposure. Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.7% as of 8:23 a.m. Tokyo time Hang Seng futures fell 0.2% Australia’s S&P/ASX 200 fell 1.1% Currencies

The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1547 The Japanese yen was little changed at 159.10 per dollar The offshore yuan was little changed at 6.8799 per dollar The Australian dollar fell 0.3% to $0.7133 Cryptocurrencies

Bitcoin fell 0.4% to $70,370.93 Ether fell 0.5% to $2,059.41 Bonds

Australia’s 10-year yield advanced 12 basis points to 4.97% Commodities

West Texas Intermediate crude rose 5.5% to $92.01 a barrel Spot gold fell 0.4% to $5,154.34 an ounce This story was produced with the assistance of Bloomberg Automation.

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