Asian stocks advanced and crude oil extended declines as President Donald Trump raised hopes for an Iran deal, even as a blockade of the Strait of Hormuz took effect. MSCI's Asia-Pacific equity index rose 1.1%, with shares in Japan and South Korea rallying on optimism that an easing of the conflict will lower oil prices and support economic growth. Technology stocks led the gains. Asia's advance came after the S&P 500 Index closed 1% higher on Monday, extending a rally that has erased losses triggered by the Iran conflict.
Helping sentiment, Brent crude fell 2.6% to $96.77 a barrel. Treasuries rose across the curve with the yield on the 10-year falling one basis point to 4.28% as cheaper oil helps contain inflation. The Bloomberg Dollar Spot Index was a touch weaker. Gold rebounded after two days of losses to trade around $4,775 an ounce, while Bitcoin rose to about $74,400.
The moves followed Trump signaling a willingness to resume talks and saying Iran had reached out to his administration after weekend negotiations collapsed. Even as the US began a naval blockade of the Strait of Hormuz — a key artery for crude oil flows from the Middle East — traders remained cautiously optimistic that last week's ceasefire-driven rally can hold.
S&P 500 erases Iran war-driven losses
Photo Credit: (Photo: Bloomberg)
"The markets really want to give peace a chance, accentuating the positives and downplaying the negatives as tensions between the US and Iran simmer away,” said Kyle Rodda, analyst at Capital.com Inc. “Despite this, the risk for further volatility remains high, with headline risk continuing to drive the action."
Meanwhile, the US blockade of the Strait of Hormuz took effect, marking Trump's latest attempt to pressure Iran to loosen its grip on the waterway, a chokepoint through which about a fifth of global oil and liquefied natural gas flows. Since the US action, at least two tankers appear to have abandoned planned transits after a military deadline to exit Iranian waters passed, underscoring the growing disruption to shipping.
Since the US and Israel launched the war in late February, the Trump administration has taken repeated steps to contain prices, including coordinating the largest-ever release of global emergency reserves. It has also eased some sanctions on Iranian oil shipments at sea in an effort to curb surges. Still, crude is holding near $100 a barrel on both benchmarks.
"I do think that we're in a place where we've accomplished our objectives. We can start to wind this thing down,” US Vice President JD Vance said in response to a question about the higher energy prices Americans are seeing due to the war in Iran.
Elsewhere, the Singapore dollar erased its gains after the country's central bank tightened its monetary policy settings.
In corporate news, the first-quarter earnings season got off to a mixed start. Goldman Sachs Group Inc. shares slipped 1.9% after better-than-expected equity trading revenue failed to offset a miss in fixed-income, currency and commodities trading, marking a rough start to earnings season.
Goldman's earnings miss offered an early read on the financial health of corporate America. JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. are due to report Tuesday as the Middle East conflict weighs on the outlook.
“Given the economic costs of higher oil prices and with the immediate turn of events highly uncertain, we think investors should avoid attempts to “trade” geopolitics,” wrote Ulrike Hoffmann-Burchardi, CIO Americas and global head of equities at UBS Global Wealth Management.
Corporate Highlights:
- United Airlines Holdings Inc.'s CEO floated a possible combination with American Airlines Group Inc., according to people familiar with the conversations. American shares jumped as much as 10% in postmarket trading.
- Somnigroup International Inc. agreed to buy bedding company Leggett & Platt Inc. in an all-stock transaction worth about $2.5 billion.
- Sandisk Corp. shares gained as the memory chipmaker is set to join the Nasdaq 100 index.
- Goldman Sachs Group Inc. is “supplementing” its cyber and infrastructure resilience after regulators warned the largest US banks about the latest artificial intelligence model from Anthropic PBC, Chief Executive Officer David Solomon said.
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Key Events This Week
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 9:50 a.m. Tokyo time
- Hang Seng futures rose 1%
- Japan's Topix rose 1.2%
- Australia's S&P/ASX 200 rose 0.5%
- Euro Stoxx 50 futures rose 0.7%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1765
- The Japanese yen rose 0.1% to 159.22 per dollar
- The offshore yuan was little changed at 6.8176 per dollar
- The Australian dollar was little changed at $0.7088
Cryptocurrencies
- Bitcoin rose 1.5% to $74,305.54
- Ether rose 5% to $2,367.09
Bonds
- The yield on 10-year Treasuries declined one basis point to 4.28%
- Japan's 10-year yield declined two basis points to 2.445%
- Australia's 10-year yield declined seven basis points to 4.95%
Commodities
- West Texas Intermediate crude fell 2.8% to $96.30 a barrel
- Spot gold rose 0.7% to $4,771.52 an ounce.
ALSO READ: Oil Prices May Rise To $150 If US Goes Ahead With Hormuz Blockade
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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