Asian markets adopted a cautious stance on Thursday as a fragile Gulf cease-fire agreement showed rapid signs of fracturing, pushing oil prices higher and reminding investors that inflationary pressures are likely to persist for an extended period. Crucially, there were few tangible signs of the Strait of Hormuz opening substantially, with Iran reinforcing its control over this critical oil transit route and demanding security fees for safe passage. U.S. President Donald Trump announced on social media that American forces would remain stationed in the Gulf region until Iran reaches and complies with a relevant agreement, warning that conflict could otherwise reignite. Meanwhile, Israel launched its most intense airstrikes on Lebanon since clashes with Iran-backed Hezbollah last month, resulting in over 250 casualties on Wednesday. deVere Group CEO Nigel Green stated, "Having 20% of global oil supplies transit through a chokepoint still effectively controlled by one side of a conflict is not a stable situation." He added, "A full blockade is not necessary for oil prices to spike significantly again. Missiles are still being fired in the Gulf, and Israel continues to fight on another front, yet markets are behaving as if regional conditions have normalized." As a result, U.S. crude futures rose 3.1% to $97.33 per barrel, while Brent crude increased 2.1% to $96.86. Japan's Nikkei 225 index hovered near the flatline after surging 5.4% in the previous session; South Korea's KOSPI fell 0.4% following a prior 6.8% rally. China's CSI 300 index declined 0.6%, and the MSCI's broad index of Asia-Pacific shares outside Japan dropped 0.7%. In U.S. markets, S&P 500 futures and Nasdaq futures both fell 0.2% as Wednesday's gains faded. European markets showed a mixed performance, with Euro Stoxx 50 futures down 0.1%, Germany's DAX futures down 0.5%, and UK FTSE futures up 0.4%. Inflation Appears Inevitable Current oil prices remain approximately 40% higher than pre-conflict levels, with hard data from around the globe expected to reflect a surge in inflation. U.S. core price data for February, scheduled for release later on Thursday, is forecast to show a significant 0.4% increase for the second consecutive month—a figure that does not yet incorporate the spike in energy costs. Minutes from the Federal Reserve's latest policy meeting indicated that a growing number of officials believe interest rate hikes may be necessary to curb inflation, although many still hope the next move will be a cut. This has tempered the rally in U.S. Treasuries, which has lagged far behind the strong gains in European bond markets. The yield on 10-year U.S. Treasuries stood at 4.296%, compared to 3.96% before the attack on Iran. Federal funds futures suggest markets now expect only 6 basis points of Fed rate cuts for the remainder of the year, having priced out 50 basis points of easing since late February. J.P. Morgan analysts noted in a report, "The committee broadly views it as too early to act, suggesting the Fed may keep rates unchanged this year, which aligns with our view." They also noted that the risk of European Central Bank rate hikes this year has shifted from two to one. The shift in interest rate expectations has helped the dollar recoup some of its earlier rapid losses. The euro held steady at $1.1669, below its recent peak of $1.1721. The dollar was firm against the yen at 158.68, after dipping to 157.89 on Wednesday. In commodity markets, gold edged up to $4,721 per ounce, after reaching an overnight high of $4,777.