<h1>Asian markets drop on Middle East tensions as Fed signals potential rate cuts</h1> Asian markets declined Thursday amid Middle East tensions, with the US president warning of potential direct involvement in the Israel conflict while Iran's leader rejected surrender calls. Japan's Nikkei fell 0.7%, Hong Kong's Hang Seng dropped 2%, and Shanghai Composite lost 0.9%. Oil prices declined as geopolitical concerns persisted. The Federal Reserve indicated possible two interest rate cuts this year, though officials emphasized uncertainty due to tariff implications. US markets remained mixed Wednesday before closing for holiday. Fed officials await clarity on tariff impacts before making policy decisions.