Stocks rose in Japan, South Korea and Australia, helping the broader MSCI Asia Pacific index rise 2.2%, a sharp turnaround after falling 3.7% on Monday. About six stocks advanced for every one that declined in the index. Wall Street gauges also reversed earlier losses to end the session on a higher note as tech stocks rallied.
The hopeful change came as Trump said the war with Iran would be resolved “very soon.” The president said he did not believe the war would end this week, but insisted the operation was ahead of schedule. He said U.S. military goals could be described as “very well accomplished.”
Brent crude fell 10% to $89.06 a barrel, well off Monday’s high of $119.50. Other markets also changed their movements. The yield on the 10-year Treasury stopped a five-day gain and the dollar extended losses made in the New York session.
The moves show how markets remain sensitive to each side in the Middle East conflict, with a single headline enough to send traders scrambling. Cross-asset volatility has shown little sign of easing — with the market’s risk index hovering near levels since Trump unveiled global tariffs last year — as investors grapple with a escalating geopolitical conflict that offers no clear trading playbook.
“What we’re seeing now is more of a relief rally after an extreme risk-free event, rather than a real turnaround in the overall risk environment,” said Dylan Wu, research strategist at Pepperstone Group.
Even so, benchmark U.S. equity index futures fell in early Asian trade, signaling a rebound may not be possible. The S&P 500 and Nasdaq 100 futures were down 0.2%, compared to losses of 0.6%. Trump’s comments at press conferences “were not a very informative signal,” so investors would do well to remain skeptical, Eric Van Nostrand, chief investment officer at Lazard Television, said in an interview with Lazard Television.
“There is a lot of misplaced confidence in the markets right now that things will ease up as soon as they have in past Middle East high pressure events,” he said. “But I think what we’re seeing today, given the potential duration of the closure of the Strait of Hormuz, is a little different. It’s going to affect the global economy in a really significant and global way.”
