Middle East tension escalates, South Korean stocks lead decline in Asia.

Oil prices surged, US stock futures and Asian stocks fell, as tensions escalated after weekend peace talks between the US and Iran broke down, with President Donald Trump ordering a blockade of the Strait of Hormuz. Global benchmark Brent crude rose 8.6% to $103.16 per barrel; European natural gas futures soared 17% in early trading. S&P 500 index futures fell 1.1%, South Korea's KOSPI index dropped over 2%, leading Asian stock indices lower, as markets feared high oil prices would drag down economic growth. The US dollar strengthened against G-10 currencies, while Asian currencies weakened, with the Korean won falling 1% at one point. US bonds fell; Japan's 10-year bond yield rose to 2.49%, the highest level since 1997. Spot gold fell 1.7% to around $4,650 per ounce, as speculation grew that rising oil prices would keep future interest rates high. US Central Command said US forces would begin blocking all ships entering and leaving Iranian ports starting at 10 am New York time on Monday. The US military will not impede the free passage of ships traveling between non-Iranian ports through the Strait of Hormuz. Iran has stated it will not allow the blockade to proceed. In specific terms, the MSCI Asia-Pacific index fell 0.5% to 247.24 points. The Nikkei 225 index fell 0.4% to 56723.27 points. Mini S&P 500 futures on the electronic board dropped 1.1%, to 6781.5 points. The yield on US 10-year Treasury bonds rose by 4.2 basis points, to 4.3587%.