Regional equities tracked losses in Wall Street, where the S&P 500 and the tech-rich Nasdaq posted a third straight day of declines, with the yield on the 30-year US Treasury climbing to levels last seen in 2007.
High energy prices sparked by the Middle East war have fuelled fears of inflation, in turn prompting the bond sell-off.
Trump told reporters at the White House on Tuesday that he had been just "an hour away" from relaunching Washington's attacks on Iran before postponing the order, after weeks of a fragile truce and stalled talks to end the war that began late February.
"You know how it is to negotiate with a country where you're beating them badly. They come to the table, they're begging to make a deal," he said.
"I hope we don't have to do the war, but we may have to give them another big hit. I'm not sure yet."
Iran's army spokesman Mohammad Akraminia warned that the Islamic republic would "open new fronts against" the United States if it resumed its attacks.
Trump offered a deadline of several days for resuming strikes if a deal was not agreed.
"I'm saying two or three days, maybe Friday, Saturday, Sunday, something, maybe early next week, a limited period of time," he said.
Since the United States and Israel began their war with Iran, the Strait of Hormuz -- a key energy corridor which normally sees 20 percent of global crude transit through -- has been effectively closed to shipping.
Brent, the international benchmark, remained above $110 a barrel and West Texas Intermediate topped $103, raising concerns that inflation could remain elevated for longer and erode corporate margins as well as consumer demand.
Across Asia, most markets were in the red. Tokyo, Seoul, Sydney, Hong Kong, Singapore, Shanghai, Wellington, Jakarta and Kuala Lumpur were down while Bangkok was in the green.
In Europe, London, Paris and Frankfurt traded lower.
The retreat comes just days after a tech-driven rally pushed global equities to fresh highs.
But investors are increasingly questioning whether the artificial intelligence-led surge in valuations has outrun underlying fundamentals.
A workers' dispute at South Korean chip giant Samsung Electronics threatened to turn into a strike, after talks on bonus payouts collapsed on Wednesday. But talks resumed with government intervention.
The threat of industrial action at Samsung -- potentially involving tens of thousands of employees -- has triggered alarm in Seoul, where officials warn prolonged disruption could ripple through exports, chip output and wider economic growth.
Attention is also turning to upcoming earnings from chip giant Nvidia as investors determine whether huge spending on AI data centres is justified by potential returns.
Gold and silver, typically seen as safe-haven assets, held near recent losses as rising yields reduced their appeal.
- Key figures at around 0810 GMT -
Brent North Sea Crude: DOWN 1.0 percent at $110.14 a barrel
West Texas Intermediate: DOWN 1.1 percent at $103.03 a barrel
Tokyo - Nikkei 225: DOWN 1.2 percent at 59,804.41 (close)
Hong Kong - Hang Seng Index: DOWN 0.6 percent at 25,651.12 (close)
Shanghai - Composite: DOWN 0.2 percent at 4,162.18 (close)
London - FTSE 100: DOWN 0.5 percent at 10,280.71
Euro/dollar: DOWN at 1.1597 from $1.1606 on Tuesday
Pound/dollar: DOWN at 1.3395 from $1.3401
Euro/pound: DOWN at 86.58 from 86.60 pence
Dollar/yen: DOWN at 158.97 from 159.04 yen
New York - DOW: DOWN 0.7 percent at 49,363.88 points (close)
abs/mtp