By Mike Dolan
March 5 –
What matters today in the US and international markets
By Mike Dolan, Editor-in-Chief, Finance and Markets
Asian markets rebounded on Thursday, with South Korea’s KOSPI rising nearly 10%, clawing back some of its gains in recent days, and Japan’s Nikkei adding nearly 2%.
The apparent respite amid the ongoing Middle East conflict was not limited to Asia, with US and European stocks also pushing higher on Wednesday as investors took comfort from even fainter signs that geopolitical tensions may be easing.
I’ll get to that and more below.
But first, check out my recent column on why Europe can absorb the Middle East’s energy shock — for now.
And listen to the latest episode of the Daily Breakfast Daily Podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
Global markets are taking a breather
Global markets seem to be catching their breath. The Nasdaq jumped 1.29% on Wednesday in a technology-led rally, while the S&P 500 advanced 0.78%, helped by some upbeat macro prints.
A combination of factors seems to be holding its breath. Traders appeared to be dismayed by a New York Times report yesterday that Iranian intelligence had indirectly contacted the CIA after Saturday’s attacks to try to reach a resolution. Washington’s plan to help reopen the Strait of Hormuz through naval forces and insurance coverage may also raise some optimism.
There was also some positive news on the labor market front ahead of Friday’s payrolls release. US private payrolls posted a higher-than-expected increase for February. The ISM non-manufacturing PMI, meanwhile, was the highest in more than three years.
But uncertainty still reigns as the Middle East turmoil enters its sixth day and a quick resolution to the Strait of Hormuz seems a remote possibility for now.
Indeed, analysts have warned that Iran could sustain drone harassment in the narrow waters for months, and it is unclear whether tankers would venture into the strait even with US naval and insurance support.
And other signs point to this being more than a day-long conflict, as the US Senate has failed to block the administration’s campaign against Tehran, giving President Trump largely unfettered authority to direct the war.
Oil prices rose on Thursday on expectations of continued turmoil. U.S. and Brent crude rose more than 2%, with the latter at $83 a barrel.
Gold also boosted safe-haven demand, and the dollar strengthened again after retreating from three-month highs.
