Asian Shares Slide On Inflation Concerns, Mounting Fed Tightening Bets

(RTTNews) - Asian stocks gave up early gains to end mostly lower on Friday, with concerns about Nvidia's leadership turmoil and increased expectations for tighter Federal Reserve policy keeping investors on edge.

A spike in oil prices and U.S. Treasury yields fueled inflation concerns after U.S. President Donald Trump downplayed the prospects of a comprehensive diplomatic solution with Iran, halted the negotiation process that Vice President Vance was advancing, and instead accepted a stalemate characterized by "no war, no talks."

Trump also indicated he may use military force against Iran if U.S. allies and ships are threatened.

The U.S. dollar rose to its highest level in about 19 months as Treasury yields climbed significantly on inflation concerns and hawkish Fed signals.

Investors will scrutinize the U.S. October PPI inflation report later in the day for additional clues on the Federal Reserve's rate trajectory.

Gold prices rose half a percent toward $3,900 an ounce in a likely technical rebound after falling for three straight sessions to the lowest level in more than a year.

Brent crude prices traded higher above $96 a barrel as Middle East supply risks offset signs of rising crude output. Iranian officials reported an attack on Sirik in Hormozgan province amid conflict with the U.S.

Four oil tankers were hit by explosions in the Strait of Hormuz after the vessels had ignored warnings and entered what Iran's military considers restricted areas of the strategic waterway.

China's Shanghai Composite index ended 0.59 percent lower at 3,634.35 after reports emerged that OpenAI is backing a bipartisan effort in U.S. Congress to curb China's access to advanced AI chips and chipmaking tools.

Hong Kong's Hang Seng index tumbled 1.55 percent to 23,637.60 Alibaba Group Holding shares fell 3.5 percent after a chip spin-off update.

Japanese markets eked out modest gains as the yen weakened past 160 per dollar for the first time since September, prompting authorities to warn of possible currency market intervention.

The Nikkei average rose 0.53 percent to 61,142.35 and logged its best weekly gain in five months, lifted by buying in AI and semiconductor-related shares. Advantest and Tokyo Electron rose around 2 percent each. The broader Topix index settled 0.11 percent higher at 3,941.57.

Seoul stocks erased earlier gains to end sharply lower as investors assessed the potential impact of the departure of Nvidia CEO Jensen Huang on the artificial intelligence (AI) ecosystem. The Kospi index fell 0.98 percent to 5,290.53.

Australian markets closed lower on concerns over rising U.S. bond yields. The benchmark S&P/ASX 200 dropped 0.71 percent to 9,082.20, dragged down by banks and mining stocks. The broader All Ordinaries index ended down 0.75 percent at 9,204.50.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index slipped 0.60 percent to 14,173.68 after Jensen Huang's departure from Nvidia plunged the AI industry into unchartered territory.

U.S. stocks closed lower overnight, oil prices surged nearly 3 percent and Treasury yields jumped after President Donald Trump claimed that the U.S. does not need to make a deal with Iran and that he was directing Vice-President J.D. Vance to focus completely on alleged crime and corruption in Democratic-run cities and states and not negotiations towards a deal to end the war with Tehran.

"Those days have long since passed," Trump said. "We've got their money, Hundreds of Billions of Dollars, and we've got their Strait!"

The two-year Treasury note yield rose to 4.867 percent, the highest since October 14 and the yield on 10-year notes reached 5.1169 percent, the highest since October 21, as traders weighed the chance of a larger-than-usual Federal Reserve rate hike next month.

The tech-heavy Nasdaq Composite, the S&P 500 and the narrower Dow all fell around 0.4 percent as Nvidia's CEO Jensen Huang resigned amid revelations about extramarital affairs and allegations of Chinese espionage, raising questions about the future of the AI boom and the U.S.-China technology ties.