Nikkei plunges over 2,100 points as Trump denies Iran talks

Japan's Nikkei 225 plunged more than 2,100 points at one stage on Wednesday, August 19, as a global risk-off wave gathered force after President Donald Trump denied any ongoing or planned talks with Iran and rising bond yields made high-valued growth stocks less attractive to investors.

The benchmark index fell 2.97 percent to 65,459.71 in early trading, with 178 of its 225 components declining. The broader Topix slipped 2.72 percent. Chipmaker Kioxia Holdings led the rout with a 10.25 percent drop, while SoftBank Group, a major investor in artificial intelligence, fell 6.47 percent. The selloff extended across Asia, with South Korea's SK Hynix ↗ 1.47% and Samsung Electronics each falling about 7 percent.businesstimes+1

Wall Street Losses Set the Stage

The Tokyo decline followed a third consecutive losing session on Wall Street on Tuesday. The Dow Jones Industrial Average fell 116 points to close at 53,343.40, while the Nasdaq Composite dropped 355 points to 26,289.71. The S&P 500 declined about 0.7 percent. The PHLX Semiconductor Index fell about 5 percent, with Intel ↘ 6.58%, Marvell Technology ↘ 7.82%, and Arm Holdings ↘ 6.67% each declining 7 percent or more.eurasiabusinessnews+2

The 30-year U.S. Treasury yield briefly touched approximately 5.34 percent, its highest level since 2007, before easing toward 5.28 to 5.30 percent by the close. "Rising long-term interest rates heightened perceptions that growth stocks were overvalued," Sony Financial Group analysts said in a report.news.bitcoin+1

Geopolitics and Oil Compound the Pressure

Trump wrote on Truth Social on August 18 that "there are no plans for talks or dialogue with Iran whatsoever," while signaling his intention to continue the blockade of the Strait of Hormuz. The comments came after a 60-day U.S.-Iran truce expired without a durable agreement. An unidentified projectile reportedly struck a cargo ship in the Strait of Hormuz overnight, according to the British navy's maritime-security monitoring agency.finance.biggo+3

Brent crude hovered above $91 a barrel while West Texas Intermediate traded near $84 to $85. The UAE added another layer of uncertainty by halting all trade, commercial exchanges, and financial transactions with Iran until further notice.eurasiabusinessnews+1

Emerging Markets Feel the Strain

India's Sensex and Nifty 50 also extended their declines on Wednesday, with the Nifty 50 entering a seventh consecutive losing session as Brent crude near $92 a barrel raised concerns about the country's import bill and inflation. Foreign portfolio investors have withdrawn around $25 billion from Indian equities during 2026. Investors now await clarity on the Federal Reserve's upcoming policy meeting minutes and the Jackson Hole symposium for signals on the path of interest rates.devdiscourse+1