Asian shares mostly gain and oil prices hold steady as the US raises pressure on Iran

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BANGKOK (AP) — Asian shares were mostly higher Tuesday after U.S. stocks drifted to a mixed finish ahead of potentially market-moving events later in the week.

U.S. futures edged higher.

Oil prices fell back after U.S. Treasury Secretary Scott Bessent announced fresh sanctions against Iran and warned that countries persisting in doing business with the Islamic Republic would face retaliation.

Tokyo's Nikkei 225 gained 0.5% to 65,856.43 and the Kospi in South Korea reversed early losses, gaining 0.7% to 6,742.74 as traders resumed buying tech shares, snapping up bargains.

Shares in Japan's SoftBank Group climbed 2.3%.

Hong Kong's Hang Seng was nearly unchanged at 25,524.18, while the Shanghai Composite index picked up 0.1% to 3,887.35.

In Australia, the S&P/ASX 200 gained 0.7% to 9,164.60.

Taiwan's Taiex jumped 0.9%, while the Sensex in India lost 0.1%.

On Monday, areas of the bond market that the U.S. Treasury Department has been trying to calm eased a bit, relieving pressure on stocks.

The S&P 500 slipped 0.3% and pulled a bit further from its all-time high set earlier this month. The Dow Jones Industrial Average added 0.3% and the Nasdaq composite fell 0.8%.

Tech stocks led the decline following big swings through the summer on worries that the frenzy around artificial-intelligence technology has sent prices too high and huge demand for AI chips will falter if AI doesn't yield enough profits.

Chip giant Nvidia, a tremendous winner of the AI boom, lost 2.9% on Monday. It will deliver its quarterly earnings report on Wednesday and that could dictate the next big move for AI-related stocks.

Drops of 5.8% for Micron Technology and 2.6% for Broadcom also helped drag the index lower.

In the bond market, the yield of the 10-year Treasury eased to 4.71% from 4.74% late Friday, returning to where it was last week before the U.S. Treasury Department announced a surprise move to increase the size of its planned buybacks of Treasurys.

While that might help contain the rise in yields for 10- and 30-year Treasurys, analysts say the buybacks are relatively small and will not fix the fundamental problems of excessive U.S. government debt and high oil prices because of the war with Iran.

Longer-term Treasury yields climbed through the summer on worries about high inflation, huge government debts and other factors. High yields make it more expensive for everyone to borrow, not just the government, and already have pushed up mortgage rates and hurt the housing industry.

“The latest discussion about using Treasury General Account cash to help finance purchases of longer-dated bonds gave the market something to chew on Monday, and it initially liked the taste. Long yields fell, and the curve flattened,” Stephen Innes of SPI Asset Management said in a commentary.

“But there is a difference between forcing the bond market to blink for an afternoon and solving the underlying problem,” he said.

The Federal Reserve's new chairman, Kevin Warsh, is set to deliver a speech Friday at an annual economic symposium in Jackson Hole, Wyoming, the backdrop for past policy announcements.

Analysts say Warsh is likely to talk about inflation and how the Fed plans to deal with it.

Oil prices are a major factor behind higher costs and Brent crude, the international standard, has been trading above the $72 per barrel level it was at before the war with Iran began in late February.

Early Tuesday, Brent crude fell 0.6% to $90.04 per barrel. U.S. benchmark crude oil shed 0.6% to $84.51 per barrel.

Last month, Brent zigzagged between $72 and $102 as hopes rose and fell that the United States and Iran could reach a deal that would allow oil tankers to freely exit the Persian Gulf again. The new U.S. sanctions announced Monday helped drag the value of Iran's currency, the rial, to a record low against the U.S. dollar.

In other dealings, the U.S. dollar rose to 159.40 Japanese yen from 159.10 yen. The euro slipped to $1.1654 from $1.1667.