Stocks Slip, Oil Rises as Trump Intensifies Threats Against Iran

By Tom Westbrook

Market Moves and Key Drivers

SINGAPORE, Feb 20 (Reuters) - Stocks fell in Asia on Friday, the dollar headed for its largest weekly gain in four months and oil prices were rising as a U.S. military build up in the Middle East and a rout in private equity stocks sent ripples of nerves across markets.

Asia Stocks Weaken

Japan's Nikkei dropped 1%. Hong Kong's Hang Seng slipped 0.3% on return from the Lunar New Year break.

Private Equity Rout: Blue Owl Fallout

Overnight on Wall Street listed private equity stocks took a beating after one manager, Blue Owl, sold assets and permanently stopped quarterly redemptions from one of its funds, stoking wider concerns about valuations and liquidity in the sector.

Blue Owl stock finished about 6% lower and shares in larger rivals Apollo Global Management and Blackstone fell more than 5%. [.N]

Brent at 6-1/2 Month Highs

Oil Rally on Iran Deadline

Benchmark Brent crude futures touched 6-1/2 month peaks above $72 a barrel as U.S. President Donald Trump set a deadline of 10 to 15 days for Iran to make a deal over its nuclear program or "really bad things" will happen. [O/R]

Positioning Ahead of Major Earnings

Taken together, the news had investors shying away from risk, said Kenji Abe, chief strategist at Daiwa Securities in Tokyo, and positioning ahead of an earnings report from the world's most valuable company, Nvidia, next week.

The chipmaker is close to finalising a $30 billion investment into OpenAI that will replace the long-term $100 billion commitment agreed upon by the companies last year, the Financial Times reported on Thursday, citing sources.

U.S. Retail and Trade Data

Walmart shares fell about 1.4% after new CEO John Furner offered a cautious outlook on the U.S. consumer.

The U.S. trade deficit widened sharply in December, data showed and the goods shortfall in 2025 was the highest on record suggesting Trump's tariffs have had little impact.

Dollar’s Weekly Gain and FX Moves

DOLLAR NOTCHES WEEKLY GAIN

In foreign exchange trade, the dollar was headed for its largest weekly rise in four months thanks to a patchwork of slightly stronger U.S. data and minutes from the Federal Reserve that suggested no hurry to lower interest rates. [FRX/]

Euro Softens, Yen Weakens

For the week the dollar is up about 0.9% on the euro, pushing the common currency to $1.1762. Morning moves were modest on Friday.

Japan's yen was lower after data showed Japanese core inflation at 2% in January, its slowest pace in two years, possibly complicating the central bank's hiking path.

For the week, the dollar is up 1.6% to 155.2 yen.

Aussie Holds, Kiwi Slips

The Australian dollar was holding its own at $0.7047 as a widening yield premium provided a buffer, while the kiwi was hamstrung by the fading chance of early rate hikes and headed for its largest weekly drop of 2026 so far. [AUD/]

Fed Minutes Show Division

10-Year Near 4.06%

Treasury Yields and Rate-Cut Debate

U.S. Treasuries were steady, with 10-year yields at 4.06%, while division evident in the Fed minutes over whether or how fast to cut rates has lifted two-year yields by five basis points over the week to 3.46%. [US/]

Investor Caution and Sentiment

"There does not seem to be much point in adding risk ahead of this weekend’s uncertainty surrounding the Middle East," saud Spectra Markets' President Brent Donnelly.

"Today feels like a good day to stay out of trouble."

(Reporting by Tom Westbrook; Editing by Kim Coghill)