Asian markets fell on Tuesday and U.S. stock futures edged lower as investors weighed conflicting signals on ceasefire efforts involving the United States, Iran, Israel and Hezbollah, raising concerns about renewed tensions in the Middle East.
Japan's Nikkei 225 fell 1.06%, while South Korea's Kospi declined 0.63%.
The moves came as U.S. equity futures pointed lower. S&P 500 futures fell 0.2%, Nasdaq 100 futures lost 0.3% and futures linked to the Dow Jones Industrial Average dropped 122 points, or 0.2%.
The market reaction followed conflicting signals over diplomatic efforts involving Iran, Israel and Hezbollah, with investors assessing the risk of further escalation in the region.
Iran Talks Continue
Iranian state media reported that the government had halted negotiations with the United States on ending the conflict in the Middle East in protest over Israel's actions in Lebanon.
The report came after Israeli Prime Minister Benjamin Netanyahu said on Monday that he had ordered strikes on Dahiyeh, a southern suburb of Beirut that has long been regarded as a Hezbollah stronghold.
The strikes had not begun at the time of the announcement. However, the threat prompted residents to leave the area, adding to traffic congestion across Beirut.
Trump Signals Progress
Trump said he believed an agreement with Iran to extend the ceasefire and reopen the Strait of Hormuz could be reached "over the next week".
In a social media post, Trump said discussions with Iran were continuing at a "rapid pace".
"Talks are continuing, at a rapid pace, with the Islamic Republic of Iran. Thank you for your attention to this matter!" Trump wrote.
Trump also said he had spoken with Netanyahu and representatives of Hezbollah.
"I had a very productive call with Prime Minister Bibi Netanyahu, of Israel, and there will be no Troops going to Beirut, and any Troops that are on their way have already been turned back," he wrote on his Truth Social account.
"Likewise, through highly placed Representatives, I had a very good call with Hezbollah, and they agreed that all shooting will stop - That Israel will not attack them, and they will not attack Israel."
Israel Maintains Position
The Lebanese presidency, citing the Lebanese embassy in the United States, said Hezbollah had agreed to a U.S. proposal for a mutual cessation of attacks that would apply across Lebanese territory.
Following Trump's comments, Netanyahu said the Israel Defense Forces would continue operations in southern Lebanon as planned.
"I spoke with President Trump this evening and told him if Hezbollah does not stop attacking our cities and citizens, Israel will attack terror targets in Beirut," Netanyahu said at a press conference.
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