Asia-Pacific stock markets declined on 1 September 2026 as investor concern over escalating military conflict between the United States and Iran drove equities lower across the region. Japan’s Nikkei 225 index fell 0.91 percent, while South Korea’s Kospi and Kosdaq indices each fell at least 1 percent, and Australia’s S&P/ASX 200 declined 0.36 percent.
Conflict escalates in Gulf
Iran launched missiles at night against two US air bases in Jordan. The Iranian attack was in response to a US attack on Iran at Larak Island in the strategic Strait of Hormuz region, one of the world’s most important energy trade routes.
Trump threatened to launch further attacks against Iran following the missile attack. Senior US officials were reported to be considering limited strikes at the Strait of Hormuz to prevent Iran from attacking ships in the strategic trade corridor.
Risk appetite retreats
The military escalation rippled through regional markets. Investors fled equities as geopolitical risk mounted in a zone critical to global energy flows.
