HONG KONG (AP) — Asian stocks tumbled Friday, with Japan’s Nikkei slumping 2.4% on heavy selling of semiconductor-related shares and other market heavyweights.

Tensions in the Middle East were weighing on sentiment across the region, and U.S. futures were sharply lower.

Oil prices jumped as the state-run IRNA news agency reported that Iran fired air defense batteries early Friday morning after reports of explosions near the city of Isfahan.

Japan’s benchmark Nikkei 225 lost 2.4% to 37,156.54, paring losses in the early trading when it plunged 3.5%.

Semiconductor equipment supplier Lasertec was the largest loser, which lost 8.4%. But most other big tech-related shares also dropped. Renesas gave up 6%, Tokyo Electron lost 8.7% and Sony Group Corp. declined 1.8%.

Toyota Motor Corp was down 2.2%.

Japan’s headline inflation rate slowed to 2.7% in March, the government reported, while the core-core index, excluding fresh food and energy costs, moderated to 2.9%, marking the first time since November 2022 that it fell below 3%.

The yen was slightly firmer against the U.S. dollar, with the latter falling to 154.38 Japanese yen from 154.64 yen.

Markets are waiting for the Japanese central bank’s next move after it raised its benchmark interest rate last month for the first time in 17 years, ending a longstanding policy of negative rates meant to boost the economy. But the rate remains near zero.

Elsewhere, Australia’s S&P/ASX 200 dipped 1.1% to 7,561.60. South Korea’s Kospi dropped 1.7% to 2,589.65. Hong Kong’s Hang Seng declined 1.4% to 16,149.44, while the Shanghai Composite was 0.5% lower to 3,059.30. Taiwan’s Taiex slumped 3.8%, with Taiwan Semiconductor Manufacturing Co shares tumbling 6.7%.

Overnight on Wall Street, the S&P 500 fell 0.2% to 5,011.12 after flipping between small gains and losses through the day. The drop was slight, but it was still enough to send the index to a fifth straight loss. That’s its longest losing streak since October, and it’s sitting 4.6% below its record set late last month.

The Dow Jones Industrial Average edged up 0.1% to 37,775.38, and the Nasdaq composite slipped 0.5% to 15,601.50.

Equifax dropped 8.5% for one of the market’s bigger losses after it reported weaker revenue for the latest quarter than analysts expected. High interest rates are pressuring its mortgage credit inquiry business.

The only stock to fall more in the S&P 500 was Las Vegas Sands, which sank 8.7% even though it reported better results than expected. Analysts said investors may be worried about competition the casino and resort company is facing in Macau, a southern China enclave that is one of the world’s biggest gambling havens.

Helping to offset those losses was Elevance Health, which climbed 3.2% after raising its profit forecast for the full year. Genuine Parts jumped 11.2% for the biggest gain in the S&P 500 after the distributor of automotive and industrial replacement parts reported stronger profit than analysts expected. It also raised its range for forecasted profits over the full year.

Stocks have been struggling recently as yields in the bond market charge higher. They’re cranking up the pressure because investors have largely given up on hopes that the Federal Reserve will deliver many cuts to interest rates this year.

Yields climbed a bit higher after more reports on Thursday showed the U.S. economy remains stronger than expected.

One report said fewer workers applied for unemployment benefits last week than economists expected. It’s the latest sign that the job market remains solid despite high interest rates.

Another report on Thursday said growth in manufacturing in the mid-Atlantic region accelerated sharply, when economists were expecting a contraction.

A third report said sales of previously occupied U.S. homes didn’t fall by quite as much last month as economists expected.

Similar data, along with a string of reports showing inflation has remained hotter than forecast this year, have pushed top Fed officials to say recently they could hold interest rates high for a while.

That’s a letdown after the Fed earlier had signaled three cuts to interest rates could be possible this year. But Fed officials have been adamant they want to be sure inflation is heading down toward their 2% target before lowering the Fed’s main interest rate from its highest level since 2001.

In oil trading, U.S. benchmark crude rose $1.16 to $83.89 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, gained $1.21 to $88.32 per barrel.

The euro dropped to $1.0635 from $1.0644.

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