Asia shares decline as worries about rising oil prices outweigh boost
from strong earnings
[August 18, 2026] By
YURI KAGEYAMA
TOKYO (AP) — Asian shares declined in early Tuesday trading, as rising
oil prices and worries about inflation worked as a dampener on some
markets, countering the optimism that had come from robust corporate
earnings reports.
Japan's benchmark Nikkei 225 dipped 1.6% to 68,098.54. Australia's S&P/ASX
200 edged up 0.2% to 9,088.60. South Korea's Kospi reversed course after
surging earlier to drop 0.6% to 6,933.60. Hong Kong's Hang Seng lost
0.6% to 25,289.88, while the Shanghai Composite shed 0.5% to 3,963.53.
Analysts said robust earnings reports in Asia, following those from the
U.S., are helping counter worries about what the war in Iran will do to
the global flow of crude and its impact on energy prices. Japan, for
one, imports almost all its oil.
“First, the beneficiary base from AI investment has broadened. Demand
spread across a wide range of industries, including semiconductor
production equipment, power equipment, machinery, electronic components,
and materials. AI demand effectively helped rediscover globally
competitive companies across these sectors,” Masashi Akutsu and
Tetsuhiro Tokuyama said in a recent report for BofA Securities.
They noted the recent strong earnings reports out of Japanese companies
for the April-June quarter, adding that, just as with the U.S. Federal
Reserve, the Bank of Japan will likely start moving to raise interest
rates in the next few months.
On Wall Street, stocks edged further away from their record heights on
Monday. The S&P 500 fell 0.5% but remains near its all-time high set
Thursday. The Dow Jones Industrial Average dropped 272 points, or 0.5%,
and the Nasdaq composite slipped 0.3%.
Wall Street’s losses solidified in the afternoon when oil prices
accelerated upward. Benchmark U.S. crude added 34 cents to $84.84 a
barrel in Asian trading early Tuesday.
The price for a barrel of Brent crude, the international standard, rose
21 cents in Tuesday trading to $91.08 a barrel. It gained 2.7% to $90.87
on Monday.
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A person walk in front of Tokyo Stock Exchange Tuesday, Aug. 18,
2026, in Tokyo. (AP Photo/Eugene Hoshiko)
 Last month alone, the Brent
zigzagged between $72 and $102 as hopes rose and fell that the
United States and Iran could reach a deal that would allow oil
tankers to freely exit the Persian Gulf again.
The rally in oil prices sent Treasury yields in the bond market
higher, which in turn raised the pressure on the economy and prices
for all kinds of investments.
The yield on the 10-year Treasury climbed to 4.72% from 4.68% late
Friday. It has shot up from just 3.97% before the war with Iran,
largely because higher oil prices are worsening inflation and upping
the probability that the U.S. Federal Reserve will have to hike
interest rates.
Higher rates could keep a lid on inflation, but they do so by
intentionally slowing the economy. The average long-term U.S.
mortgage rate has already jumped near its highest level in a year
because of the rise in the 10-year Treasury yield, though reports
last week said that inflation in July was not as bad as earlier in
the summer.
All told, the S&P 500 fell 40.70 points to 7,745.06. The Dow Jones
Industrial Average dropped 272.63 to 53,459.78, and the Nasdaq
composite slipped 84.25 to 26,644.91.
In currency trading, the U.S. dollar rose to 159.43 Japanese yen
from 159.37 yen. The euro cost $1.1585, inching up from $1.1581.
___
AP Business Writer Stan Choe contributed to this report.
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