Shares and oil prices gain as the world waits to see if US will join Israel's war against Iran

Key Points

• Crude oil prices rose modestly (U.S. benchmark to $73.65, Brent to $76.89) as investors feared potential disruptions from an Israel-Iran conflict and awaited U.S. clarity on joining the war.
• Asian shares traded mixed: Tokyo’s Nikkei edged up 0.1%, Hong Kong’s Hang Seng jumped 1.2%, while Australia’s S&P/ASX 200 fell 0.3% amid cautious risk sentiment.
• The White House said President Trump could decide within two weeks on military action with Israel against Iran but still regards diplomacy as an option, keeping markets on edge.
• U.S. tariffs and unexpectedly high Japanese core inflation (3.7% in May) remain key headwinds as central banks weigh trade-policy risks.

MANILA, Philippines (AP) — World shares are mostly higher and crude oil prices have rebounded as investors wait to see if the U.S. will join Israel’s war against Iran.

Britain's FTSE 100 was 0.4% higher at 8,829.82 and the CAC-40 in Paris gained 0.6% to 7,595.06. Germany's DAX rose 0.9% at 23,256.98.

U.S. futures edged lower after Wall Street was closed on Thursday for the Juneteenth holiday, with contracts for the S&P 500 and the Dow Jones Industrial Average down 0.2%.

U.S. benchmark crude oil gained 52 cents to $75.66 per barrel, while Brent crude, the international standard added 31 cents to $77.01 per barrel.

Oil prices have been gyrating as fears rise and ebb that the conflict between Israel and Iran could disrupt the global flow of crude. Iran is a major producer of oil and also sits on the narrow Strait of Hormuz, through which much of the world’s crude passes.

Investors remained wary after the White House said President Donald Trump could decide on whether to launch an attack on Israel within the next two weeks, but that he “still believes diplomacy is an option,” said Anderson Alves, a trader at ActivTrades.

“The stock market’s risk premium isn’t just rising — it’s recalibrating for a world where every macro lever now doubles as a tripwire,” Stephen Innes of SPI Asset Management said in a commentary, adding that traders are bracing for what comes next.

“A delayed fuse is still a fuse,” he said.

Trump's tariffs agenda may have been eclipsed by the conflict in the Middle East, but it remains another major factor weighing on markets.

Tokyo's Nikkei 225 index edged 0.2% lower to 38,403.23 after Japan reported that its core inflation rate, excluding volatile food prices, rose to 3.7% in May, adding to challenges for Prime Minister Shigeru Ishiba’s government and the central bank.

“Core Japanese inflation rose more than expected in May. Even so, the Bank of Japan is likely to prioritize the negative impact of U.S. tariffs, Min Joo Kang of ING Economics said in a commentary. ”For now, it’s more concerned about the risk that US trade policies could break the virtuous circle of wage growth and inflation."

Hong Kong’s Hang Seng index climbed to 1.3% to 23,530.48, while the Shanghai Composite fell 0.2% to 3,359.90. China's central bank kept its key 1-year and 5-year loan prime rates unchanged, as expected.

Australia’s S&P/ASX 200 shed 0.2% to 8,505.50, while South Korea’s Kospi gained 1.5% to 3,021.84.

On Thursday, the Bank of England kept its main interest rate at a two-year low of 4.25%, citing risks that the conflict between Israel and Iran will escalate.

The U.S. dollar slipped to 145.37 Japanese yen from 145.46 yen. The euro rose to $1.1516 from $1.1498.