Oct 02, V7N- Asian stocks declined on Wednesday, responding to the market turmoil triggered by Iran's ballistic missile strike on Israel, which escalated concerns about a broader regional conflict. The heightened geopolitical tensions also drove crude oil prices higher amid fears of supply disruptions. Investors sought safer assets, leading to a drop in U.S. Treasury bond yields and keeping gold near its record high.

Japan's Nikkei fell 1.5%, South Korea's KOSPI dropped 1.3%, and Australia's benchmark lost 0.3%. Hong Kong’s Hang Seng had yet to reopen after a holiday, and Chinese markets remained closed for the Golden Week holiday. Trading in Taiwan was suspended due to a typhoon. In the U.S., S&P 500 futures weakened following a 0.9% loss in the previous session.

The safe-haven U.S. dollar remained near a three-week high against the euro, supported by a strong U.S. labor market, which has tempered expectations of a large Federal Reserve rate cut in November. Meanwhile, eurozone inflation data reinforced expectations of an ECB rate cut later this month.

Oil prices continued to rise, with Brent crude increasing over 1% to $74.33 per barrel and U.S. WTI futures gaining 1.3% to $70.73. Gold eased slightly after approaching record highs in the previous session.

Geopolitical uncertainty around the Israel-Iran conflict remains a key factor in market volatility, with potential retaliatory actions by Israel and the U.S. likely to impact investor sentiment.

On the macroeconomic front, U.S. job openings rose unexpectedly in August, indicating a resilient economy, though hiring data suggests a slowing labor market. Investors will focus on upcoming private payroll data and non-farm payroll numbers later in the week. U.S. political attention will also be on the vice-presidential debate between Tim Walz and JD Vance.

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