Jakarta. Indonesian stocks closed slightly lower on Wednesday as a global bond sell-off pushed yields higher, weighing on risk assets amid growing concerns that rising oil prices from the escalating US-Iran conflict could reignite inflation.

The benchmark Jakarta Composite Index (JCI) shed 4 points, or 0.06%, to close at 6,595.

A total of 63.8 billion shares changed hands in 2.45 million transactions, generating Rp 16.8 trillion ($946.4 million) in turnover. Decliners outnumbered gainers by 321 to 282, while 186 stocks were unchanged.

Pilarmas Investindo Sekuritas said the JCI came under pressure mainly from global sentiment, as a surge in crude oil prices following the escalation of US-Iran tensions raised concerns that higher energy costs could reignite inflationary pressures.

Market sentiment deteriorated after the US launched fresh attacks on Iranian targets near the Strait of Hormuz. Iran subsequently retaliated by attacking US military bases in Jordan, Kuwait, and Bahrain.

“The escalation of the conflict has pushed crude oil prices higher. Rising energy prices have become a concern for investors because they could increase inflation and ultimately narrow the room for central banks, particularly the Federal Reserve, to ease monetary policy,” Pilarmas wrote in its Wednesday research note.

Those concerns were also reflected in rising global bond yields, as investors sold bonds amid growing worries over inflation, expectations of tighter monetary policy, and worsening fiscal conditions in several countries.

According to Pilarmas, higher bond yields have added further pressure on risk assets, including equities. Markets are now increasingly watching whether the Fed will keep interest rates high or even tighten policy should inflationary pressures pick up again.

On the domestic front, Indonesia's trade performance provided a positive catalyst. The country recorded a $120 million trade surplus in July 2026, bringing the cumulative surplus for January-July to $3.70 billion.

The surplus was a positive signal for the resilience of Indonesia's external sector, although it was not enough to fully offset the pressure from global developments.

“However, the domestic catalyst has not been able to fully offset the pressure from global sentiment. Market participants remain more focused on developments in the US-Iran conflict, movements in oil prices and global bond yields, as well as the outlook for the Fed's policy,” Pilarmas said.

Asian markets also tumbled on Wednesday after Wall Street closed lower and a global bond market sell-off deepened.

Tokyo's Nikkei 225 fell 2.9%, while South Korea's Kospi dropped 4%. Hong Kong's Hang Seng slipped 0.3%, and Shanghai's Composite Index declined 1%.

On Tuesday, Wall Street's benchmark S&P 500 fell 0.7%. The Dow Jones Industrial Average dropped 0.8%, while the technology-heavy Nasdaq Composite lost 1%.

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