Stocks gain, dollar wobbles as Trump extends Iran ceasefire
- MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.14% after hitting a seven-week high in the previous session
SINGAPORE: US stock futures rose and the dollar wavered on Wednesday after President Donald Trump said he would indefinitely extend the Iran ceasefire keeping sentiment buoyed although with the Strait of Hormuz still closed oil held onto its recent gains.
Trump’s announcement appeared to be unilateral, and it was not immediately clear whether Iran, or US ally Israel, would agree to extend the ceasefire, which began two weeks ago.
Markets though took the news in stride with risk momentum intact. S&P futures rose 0.5% while Nasdaq futures gained 0.6% in early Asian hours.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.14% after hitting a seven-week high in the previous session. Japan’s Nikkei was down 0.2% as traders consolidated their recent gains.
After a sharp selloff in March due to war in the Middle East, markets across the globe have swiftly rebounded this month and are back at pre-war levels as the prospect of a peace deal and the ceasefire have helped risk sentiment.
“It appears markets were right to assume peak war uncertainty is behind us,” said Matt Simpson, a senior market analyst at StoneX.
Stocks rebound as Iran peace talks in focus; Warsh hearing looms
“Risk seems likely to remain buoyant and dips viewed favourably by equity bulls. The closure of the Strait of Hormuz is already priced in.”
Trump said he would continue the U.S. Navy’s blockade of Iran’s ports and shore. Tehran has effectively closed the Strait of Hormuz through which one-fifth of world’s energy supply usually flows, causing a global energy shock.
U.S. West Texas Intermediate crude futures climbed 0.44% to $90.12 a barrel. The benchmark contract rose 2.8% on Tuesday.
In currencies, the euro last fetched $1.1748 in early trading. The yen was a bit stronger at 159.26 per dollar and sterling firmed to $1.35195.