Asian markets showcased a diverse performance on Tuesday, with South Korea's Kospi index surging to an unprecedented high. Investors reacted positively to glimmers of hope regarding potential peace talks between the U.S. and Iran, a significant driver after a public holiday. The Kospi climbed dramatically, reaching an intraday record of 8,131.15 points before closing up 2.55% at 8,047.51. The small-cap Kosdaq also registered gains, ending 0.98% higher.
Sentiment across the region was broadly influenced by President Donald Trump's remarks on Monday, who indicated that negotiations with Iran were "proceeding nicely." However, Trump also issued a stern warning that the U.S. could resume military attacks if these talks were to fail, highlighting the volatile nature of the situation.
This geopolitical tension manifested in mixed movements for oil prices. International benchmark Brent futures rose 2.09% to $98.15 per barrel for July delivery. Conversely, West Texas Intermediate (WTI) futures for July dropped 5.13% to $91.64 per barrel as of 2:41 a.m. ET, with its movement also impacted by the U.S. Memorial Day holiday, which led to no WTI price settlement on Monday.
Further complicating the picture, the U.S. Central Command confirmed it had conducted "self-defense strikes" targeting Iranian missile launch sites and boats attempting to lay mines in the southern part of the Islamic Republic. Adding to the strategic analysis, former CIA Director David Petraeus suggested to CNBC's Lisa Kim that Tehran appeared to be "blinking" over the strategically vital Strait of Hormuz.
Currency dealers monitor exchange rates in a foreign exchange dealing room at the Hana Bank headquarters in Seoul on May 15, 2026.
Jung Yeon-je | Afp | Getty Images
Elsewhere in Asia, Japan's Nikkei 225 experienced a slight retreat, ending Tuesday's session 0.25% lower at 64,996.09, as investors engaged in profit-taking after the index spectacularly crossed the 65,000 mark for the first time on Monday during holiday-thinned trading. The Topix index also registered a marginal dip to 3,938.46. Bank of Japan's Deputy Governor Ryozo Himino commented that the timing for a potential rate hike remains under review, with the central bank closely monitoring Middle East developments, according to Reuters.
Australia's S&P/ASX 200 edged down 0.39% to 8,657.80. In mainland China, the CSI 300 posted a modest gain of 0.22%, while Hong Kong's Hang Seng Index, returning from its own public holiday on Monday, reversed early losses to finish 0.3% higher. Indian benchmarks, the Nifty 50 and BSE Sensex, traded flat amidst choppy conditions.
Looking ahead to the U.S. market open, S&P 500 futures gained 0.78%, Nasdaq-100 futures advanced 1.14%, and Dow Jones Industrial Average futures popped 371 points, or 0.73%. U.S. stock markets were closed Monday due to the Memorial Day holiday.
