Asian stocks diverge as oil jumps past $104 after Trump’s vow to buy Russian diesel

Asian trading on Monday, October 12 opened with a sharp split between equities and commodities. According to AP, President Donald Trump said the United States would purchase diesel fuel from Russia, a remark that sent Brent crude futures surging to around $104 a barrel. While Tokyo markets were closed for a holiday, investors across the region focused on how higher energy prices might interact with U.S. stocks, which ended last week near record highs.

Rising oil prices typically support energy producers, but they weigh on fuel‑intensive sectors such as airlines, logistics and basic materials. As a result, a crude rally does not automatically lift broad equity indices. More importantly for global investors, expensive oil can re‑ignite consumer price inflation, forcing the Federal Reserve to keep interest rates higher for longer. That, in turn, pushes up long‑term bond yields and can pressure both stock and bond valuations worldwide.

The backdrop is already delicate: U.S. shares, led by AI‑related names, remain close to record levels, while the 10‑year Treasury yield has climbed into the 5% range. Portfolio managers are locked in a tug‑of‑war between stocks and bonds, and Trump’s diesel comments add fuel to all three major themes shaping markets—energy, inflation and interest rates—potentially increasing volatility in global assets this week.