Stocks fall and oil prices gain after Trump warns the Iran 'clock is
ticking'
[May 18, 2026] By
CHAN HO-HIM
HONG KONG (AP) — World shares mostly retreated and oil prices jumped on
Monday after U.S. President Donald Trump warned Tehran that the “clock
is ticking” as U.S.-Iran negotiations over a permanent end to the war
stall.
U.S. futures fell and markets in Japan and South Korea pulled back from
their records. In early European trading, Britain's FTSE 100 edged up
0.1% to 10,205.31. France's CAC 40 lost 0.9% to 7,883.42, and Germany's
DAX dropped 0.1% to 23,925.82.
During Asian trading, Tokyo’s Nikkei 225 fell 1% to 60,815.95, a decline
led by technology-related stocks. It reached all-time intraday high
levels last week above 63,000.
The yield on the 10-year Japanese government bond surged to as high as
2.8%, its highest level since the late 1990s. That's part of a broader
shift toward higher yields as the Bank of Japan gradually raises
interest rates and higher energy costs raise expectations of rising
inflation. The yield was around 2.55% just one week ago.
Seoul’s Kospi climbed 0.3% to 7,516.04 after trading lower earlier in
the day. It crossed the 8,000 mark for the first time on Friday,
supported by buying of technology shares driven by the boom in
artificial intelligence, but later declined partly on profit-taking by
investors.
Hong Kong’s Hang Seng lost 1.1% to 25,675.18. The Shanghai Composite
index edged 0.1% lower to 4,131.53, after China reported
weaker-than-expected economic data for April.
Australia’s S&P/ASX 200 declined 1.5% to 8,505.30.
Taiwan’s Taiex dropped 0.7%, while India’s Sensex fell less than 0.1%.
Oil prices rose after Trump warned Iran in a social media post that “the
Clock is Ticking, and they better get moving, FAST, or there won’t be
anything left of them” following a call with Israeli Prime Minister
Benjamin Netanyahu.
Trump has set deadlines for Iran and then backed off, so investors have
remained cautious about the situation in the Strait of Hormuz and how it
is impacting global energy flows, including oil and gas. The strait is
still mostly closed, and the U.S. has also imposed its own sea blockade
on Iranian ports since last month.
A drone strike over the weekend on a United Arab Emirates’ nuclear power
plant added to worries over a potential escalation in the conflict.
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A person walks in front of an electronic stock board showing Japan's
Nikkei index at a securities firm Monday, May 18, 2026, in Tokyo.
(AP Photo/Eugene Hoshiko)
 Brent crude, the international
standard, gained 0.7% to $110.05 per barrel. It was trading at
roughly $70 a barrel in late February before the start of the Iran
war. Benchmark U.S. crude was trading 1% higher to $106.49 per
barrel.
“Re-escalation risks are increasing,” ING commodities strategists
Warren Patterson and Ewa Manthey wrote in a research note. While
there has also been a pick up on shipping activities over the past
week around the strait, they said, “this can change quickly.”
The pair also noted that the oil market was reacting to the lack of
tangible results on the Iran war after last week’s widely-watched
summit between Trump and Chinese President Xi Jinping in Beijing,
even as the White House said both the U.S. and China had agreed that
the Strait of Hormuz must remain open.
U.S. officials had hoped that Beijing could use its influence, given
its economic ties with Iran, to help broker a peace agreement and
reopen the strait. Trump said last week in an interview that Xi told
him China “would like to be of help” in negotiating an end to the
war. So far it's been unclear how Beijing might do that.
The yield on the U.S. 10-year Treasury was at around 4.60%, up from
4.47% last Thursday and sharply higher than the nearly 4% level it
was holding at before the Iran war.
On Friday, the benchmark S&P 500 dropped 1.2% from the record it set
the day before. The Dow Jones Industrial Average fell 1.1% and the
technology-heavy Nasdaq composite lost 1.5%.
In other dealings early Monday, the U.S. dollar rose to 158.82
Japanese yen from 158.62 yen. The euro was trading at $1.1645, up
from $1.1622.
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