Wall Street points to gains as US raises pressure on Iran and trade war with Canada intensifies

Asian shares are mostly higher after U.S. stocks drifted to a mixed finish ahead of potentially market-moving events later in the week

BANGKOK -- Asian shares were mostly higher Tuesday after U.S. stocks drifted to a mixed finish ahead of potentially market-moving events later in the week.

Oil prices fell back after U.S. Treasury Secretary Scott Bessent announced fresh sanctions against Iran and warned that countries persisting in doing business with the Islamic Republic would face retaliation.

Tokyo's Nikkei 225 gained 0.5% to 65,856.43 and the Kospi in South Korea reversed early losses, gaining 0.7% to 6,742.74 as traders resumed buying tech shares, snapping up bargains.

Hong Kong's Hang Seng was nearly unchanged at 25,524.18, while the Shanghai Composite index picked up 0.1% to 3,887.35.

On Monday, areas of the bond market that the U.S. Treasury Department has been trying to calm eased a bit, relieving pressure on stocks.

The S & P 500 slipped 0.3% and pulled a bit further from its all-time high set earlier this month. The Dow Jones Industrial Average added 0.3% and the Nasdaq composite fell 0.8%.

Tech stocks led the decline following big swings through the summer on worries that the frenzy around artificial-intelligence technology has sent prices too high and huge demand for AI chips will falter if AI doesn't yield enough profits.

Chip giant Nvidia, a tremendous winner of the AI boom, lost 2.9% on Monday. It will deliver its quarterly earnings report on Wednesday and that could dictate the next big move for AI-related stocks.

Drops of 5.8% for Micron Technology and 2.6% for Broadcom also helped drag the index lower.

In the bond market, the yield of the 10-year Treasury eased to 4.71% from 4.74% late Friday, returning to where it was last week before the U.S. Treasury Department announced a surprise move to increase the size of its planned buybacks of Treasurys.

While that might help contain the rise in yields for 10- and 30-year Treasurys, analysts say the buybacks are relatively small and will not fix the fundamental problems of excessive U.S. government debt and high oil prices because of the war with Iran.

Longer-term Treasury yields climbed through the summer on worries about high inflation, huge government debts and other factors. High yields make it more expensive for everyone to borrow, not just the government, and already have pushed up mortgage rates and hurt the housing industry.

“The latest discussion about using Treasury General Account cash to help finance purchases of longer-dated bonds gave the market something to chew on Monday, and it initially liked the taste. Long yields fell, and the curve flattened,” Stephen Innes of SPI Asset Management said in a commentary.