Japanese stocks fell sharply on Wednesday after renewed U.S.-Iran military strikes pushed oil prices higher and stoked worries about economic growth. The Nikkei 225 ended down 2.95% at 64,254.56, while the Topix fell 2.37%. Higher government bond yields weighed on growth shares, with tech and chip-related names under pressure and SoftBank Group down more than 6%. Defensive drugmakers bucked the decline and rose.

Renewed Middle East hostilities pushed oil prices higher, with Brent futures at $95.52 a barrel and WTI at $91.02. Expectations of a Federal Reserve rate hike in September rose to 67% from about 40% a week earlier, while the 10-year U.S. Treasury yield climbed to 4.8%. The dollar strengthened as the pound slipped to $1.3509, the Australian dollar held at $0.7143, and the yen stayed weak.

HDFC Bank CEO Sashidhar Jagdishan will depart after his term ends next month. New chairman Rajiv Kumar sought aggressive changes and executive replacements. Jagdishan resisted some proposals and decided not to seek reappointment. The bank now faces a swift search for a new leader. This departure adds to recent turmoil and stock market struggles.

Renewed military strikes between the U.S. and Iran pushed oil prices sharply higher, with WTI up 3.38% to $86.24 a barrel and Brent up 3.52% to $91.20 per barrel. The jump in crude intensified inflation concerns after Federal Reserve Chair Kevin Warsh made hawkish remarks, lifting expectations for a September rate hike. The 10-year U.S. Treasury yield climbed to 4.764% and the 30-year yield rose to 5.266%, both hitting recent highs.

Federal Reserve Chair Kevin Warsh said policymakers still “have work to do” if they do not gain enough confidence that inflation is moving toward the 2% target, lifting expectations for a September rate increase. Gold has fallen for four straight sessions, down Rs 9,500 per 10 grams, while silver is down Rs 7,700 per kg over three sessions. Spot gold hit its lowest level since August 19 during the session.

Federal Reserve Chair Kevin Warsh struck a hawkish tone on Friday, suggesting the central bank may raise rates if inflation does not move back toward its 2% target. Markets lifted the implied probability of a September hike to 57% from 36% on that signal. Spot gold was flat on Monday at $4,455.29 an ounce after touching its lowest level since August 19 and dropping more than 3% on Friday. December gold futures slipped 0.6% to $4,504.90 as investors awaited U.S. labor-market reports due this week.

Crude oil prices ended a three-week rally, posting their first weekly decline in nearly a month. Brent fell more than 5% for the week, while WTI dropped more than 4%. Improving passage through the Strait of Hormuz eased supply worries, though Goldman Sachs and JPMorgan warned that prolonged shipping disruptions could still keep upside risks in play.

Federal Reserve Chair Kevin Warsh said at the Jackson Hole central bankers’ meeting that inflation remains “concerning,” and said the central bank’s predominant focus should be on prices. The latest reading of the Fed’s preferred inflation gauge was 3.7% this week, extending a run of more than five years above the 2% target. While the Fed has kept rates unchanged through 2026, a growing group of policymakers has argued for hikes to counter price pressures tied to U.S. President Donald Trump’s war on Iran and tariff policies.

The U.S. defense sector has an urgent need for high-purity aluminium, but domestic capacity is limited and new facilities take years to come online. The United States relied on imports for 60% of its aluminium last year, and high-purity supplies have become more exposed after an attack on a key supplier. Tariffs have only modestly lifted output, leaving a large domestic shortfall, while Canada could offer a short-term backstop. The federal government has committed $500 million to support related projects.