GLOBAL MARKETS: Stocks dip and oil climbs as Trump turns up the heat on Iran

SINGAPORE - Stocks fell in Asia on Friday, the dollar headed for its largest weekly gain in four months and oil prices were rising as a U.S. military buildup in the Middle East and a rout in private equity stocks rippled across nervous markets.

Japan's Nikkei .N225 dropped 1%. Hong Kong's Hang Seng .HSI slipped 0.6% on return from the Lunar New Year break with selling heaviest in e-commerce and technology shares.

S&P 500 futures ESc1 were up 0.2% and European futures STXec1 rose 0.3%. On Wall Street private equity stocks took a beating after Blue Owl Capital sold assets and permanently stopped quarterly redemptions from one of its funds, stoking wider concern about valuations and liquidity in the sector.

Blue Owl stock OWL.N finished about 6% lower and shares in larger rivals Apollo Global Management APO.N and Blackstone BX.N fell more than 5%. .N

Benchmark Brent crude futures LCOc1 touched 6-1/2-month peaks above $72 a barrel as U.S. President Donald Trump set a deadline of 10 to 15 days for Iran to make a deal over its nuclear program or "really bad things" will happen. O/R

Taken together, the news had investors shying away from risk, said Kenji Abe, chief strategist at Daiwa Securities in Tokyo, and positioning ahead of an earnings report from the world's most valuable company, Nvidia NVDA.O, next week.

The chipmaker is close to finalising a $30 billion investment into OpenAI that will replace the long-term $100 billion commitment agreed upon by the companies last year, the Financial Times reported, citing sources.

Chipmakers, which are turning eye-watering profits from the AI buildout, have so far been insulated from recent selling in software and other sectors seen at risk from disruption.

But the pressure on Blue Owl, a lender to such companies, reflects rising concern over returns on AI investment.

"The episode has also exposed excess leverage used to finance some of the AI capital expenditure and software companies," said Nick Ferres, CIO at Vantage Point Asset Management in Singapore.

"There are parallels with the off-balance sheet financing and risk transfer pricing in 2008," he said. "(Though) the current episode is more likely a liquidity issue not a solvency one."

DOLLAR NOTCHES WEEKLY GAIN

In foreign exchange trade, the dollar was headed for its largest weekly rise in four months thanks to a patchwork of slightly stronger U.S. data and minutes from the Federal Reserve that suggested no hurry to lower interest rates. FRX/

For the week the dollar is up about 1% on the euro EUR=, pushing the common currency to $1.1753.

Japan's yen was lower after data showed the nation's core inflation at 2% in January, its slowest pace in two years, possibly complicating the central bank's hiking path.

For the week, the dollar is up 1.6% at 155.2 yen JPY=.

The Australian dollar AUD= slipped 0.3% to $0.7038, though a widening yield premium provided a buffer, while the kiwi NZD= was hamstrung by the fading chance of early rate hikes and headed for its largest weekly drop of 2026 so far. AUD/

U.S. Treasuries were steady, with 10-year yields US10YT=RR at 4.07%, while division evident in the Fed minutes over whether or how fast to cut rates has lifted two-year yields US2YT=RR by five basis points over the week to 3.46%. US/

"There does not seem to be much point in adding risk ahead of this weekend’s uncertainty surrounding the Middle East," said Spectra Markets' President Brent Donnelly.

"Today feels like a good day to stay out of trouble."

-Reporting by Tom Westbrook; Editing by Kim Coghill and Shri Navaratnam/Reuters