Emerging-market assets experienced significant declines on Friday, primarily due to heightened concerns that the ongoing conflict in the Middle East could exacerbate global inflation, prompting central banks to increase interest rates. The MSCI Emerging Market Index fell 2.8%, marking its largest drop since March 23, while the MSCI EM Currency index decreased by 0.4%. Major currencies, including the Brazilian real and the South African rand, fell at least 1.2% each as the US dollar strengthened for the fifth consecutive day. US 10-year bond yields neared 4.6%, the highest level in nearly a year, as rising inflation data fueled speculation about potential interest rate hikes by the Federal Reserve. Analysts indicate that geopolitical tensions, particularly surrounding the Strait of Hormuz and Taiwan, are heavily influencing investor sentiment. South Korea's equity market led the selloff with a 6.1% drop, reflecting a cooling enthusiasm for artificial intelligence stocks. Overall, the situation underscores the significant impact of geopolitical developments on global financial markets.