Asia shares decline as worries about rising oil prices outweigh perks from strong earnings

TOKYO (AP) — Asian shares declined in early Tuesday trading, as rising oil prices and worries about inflation worked as a dampener on some markets, countering the optimism that had come from robust corporate earnings reports.

Japan's benchmark Nikkei 225 dipped 1.6% to 68,098.54. Australia's S&P/ASX 200 edged up 0.2% to 9,088.60. South Korea's Kospi reversed course after surging earlier to drop 0.6% to 6,933.60. Hong Kong's Hang Seng lost 0.6% to 25,289.88, while the Shanghai Composite shed 0.5% to 3,963.53.

Analysts said robust earnings reports in Asia, following those from the U.S., are helping counter worries about what the war in Iran will do to the global flow of crude and its impact on energy prices. Japan, for one, imports almost all its oil.

“First, the beneficiary base from AI investment has broadened. Demand spread across a wide range of industries, including semiconductor production equipment, power equipment, machinery, electronic components, and materials. AI demand effectively helped rediscover globally competitive companies across these sectors,” Masashi Akutsu and Tetsuhiro Tokuyama said in a recent report for BofA Securities.

They noted the recent strong earnings reports out of Japanese companies for the April-June quarter, adding that, just as with the U.S. Federal Reserve, the Bank of Japan will likely start moving to raise interest rates in the next few months.

On Wall Street, stocks edged further away from their record heights on Monday. The S&P 500 fell 0.5% but remains near its all-time high set Thursday. The Dow Jones Industrial Average dropped 272 points, or 0.5%, and the Nasdaq composite slipped 0.3%.

Wall Street’s losses solidified in the afternoon when oil prices accelerated upward. Benchmark U.S. crude added 34 cents to $84.84 a barrel in Asian trading early Tuesday.

The price for a barrel of Brent crude, the international standard, rose 21 cents in Tuesday trading to $91.08 a barrel. It gained 2.7% to $90.87 on Monday.

Last month alone, the 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 rally in oil prices sent Treasury yields in the bond market higher, which in turn raised the pressure on the economy and prices for all kinds of investments.

The yield on the 10-year Treasury climbed to 4.72% from 4.68% late Friday. It has shot up from just 3.97% before the war with Iran, largely because higher oil prices are worsening inflation and upping the probability that the U.S. Federal Reserve will have to hike interest rates.

Higher rates could keep a lid on inflation, but they do so by intentionally slowing the economy. The average long-term U.S. mortgage rate has already jumped near its highest level in a year because of the rise in the 10-year Treasury yield, though reports last week said that inflation in July was not as bad as earlier in the summer.

All told, the S&P 500 fell 40.70 points to 7,745.06. The Dow Jones Industrial Average dropped 272.63 to 53,459.78, and the Nasdaq composite slipped 84.25 to 26,644.91.

In currency trading, the U.S. dollar rose to 159.43 Japanese yen from 159.37 yen. The euro cost $1.1585, inching up from $1.1581.

AP Business Writer Stan Choe contributed to this report.

Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

Options traders Chris Dattolo, Scott Frinzi, Justin Kanda, and Ravi Bhandari, left to right, work on the floor of the New York Stock Exchange, Monday, Aug. 17, 2026, in New York. (AP Photo/Yuki Iwamura)

A general view shows the New York Stock Exchange, Friday, Aug. 7, 2026, in New York. (AP Photo/Yuki Iwamura)

People walk past the Nasdaq MarketSite, Thursday, Aug. 6, 2026, in New York. (AP Photo/Yuki Iwamura)

A person walk in front of an electronic stock chart board showing Japan's Nikkei index at a securities firm Tuesday, Aug. 18, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walk in front of Tokyo Stock Exchange Tuesday, Aug. 18, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

People look at an electronic stock chart board showing Japan's Nikkei index at a securities firm Tuesday, Aug. 18, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

NEW YORK (AP) — Zheng Qinwen made a daring escape from a 5-0 deficit for the second straight match, with this comeback sending her back into the U.S. Open quarterfinals.

The Olympic gold medalist from China beat No. 8 seed Iga Swiatek 7-5, 6-3 on Monday to become the first qualifier to reach the final eight in Flushing Meadows since Emma Raducanu won the title in 2021.

Two days after she was down 5-0 in the third set before winning the final seven games to stun No. 22 Madison Keys 1-6, 7-6 (3), 7-5, Zheng quickly dropped the first five games against Swiatek, the 2022 U.S. Open champion.

“I guess to come back 0-5 yesterday is not lucky, that’s all I can say,” Zheng said.

Swiatek couldn't convert two set points serving at 5-1 and Zheng fought off another when Swiatek served with a 5-3 lead. She said she was so focused on each point that she even forgot the score.

Zheng was a U.S. Open quarterfinalist in 2023 and 2024 but after elbow surgery had to go through qualifying this year to reach the main draw. Raducanu's title five years ago made her the first qualifier to win a Grand Slam title in the Open era, which dates to 1968.

Swiatek came in with a 7-1 record against Zheng, with the only loss two years ago in the Olympic semifinals in Paris. Zheng came back from a 4-0 deficit in the second set that day to stop Swiatek’s 25-match winning streak at Roland Garros, where she has won four French Open titles.

Zheng will play either two-time champion Naomi Osaka or No. 2 Elena Rybakina in the quarterfinals.

French Open champion Mirra Andreeva came back to beat No. 24 Anastasia Potapova 5-7, 6-4, 6-3 and the No. 5 seed will face either No. 4 Coco Gauff or No. 14 Iva Jovic. The two Americans meet Monday night in the opening match of the night session.

See AP’s full tennis coverage here

Iga Swiatek, of Poland, receives a massage during a medical timeout durnig a match against Qinwen Zheng, of China, during the fourth round of the U.S. Open tennis championships, Monday, Sept. 7, 2026, in New York. (AP Photo/Seth Wenig)

Iga Swiatek, of Poland, returns the ball to Qinwen Zheng, of China, during the fourth round of the U.S. Open tennis championships, Monday, Sept. 7, 2026, in New York. (AP Photo/Seth Wenig)

Iga Swiatek, of Poland, reacts during a match against Qinwen Zheng, of China, during the fourth round of the U.S. Open tennis championships, Monday, Sept. 7, 2026, in New York. (AP Photo/Seth Wenig)

Qinwen Zheng, of China, reacts during a match against Iga Swiatek, of Poland, during the fourth round of the U.S. Open tennis championships, Monday, Sept. 7, 2026, in New York. (AP Photo/Seth Wenig)