Oil held steady and stocks rallied after the Wall Street Journal reported that US president Donald Trump had signalled he was willing to end the US military campaign against Iran.
Brent fell 1 per cent to $106.28 a barrel. S&P 500 futures advanced 1.1 per cent, trimming losses after a selloff that left the benchmark on course for its worst month since 2022. Europe’s Stoxx 600 rose 0.9 per cent. Treasuries extended their rebound, with the two-year yield dropping two basis points to 3.81 per cent.
The month-long war in the Middle East has roiled markets as Iran responded to US and Israeli attacks with a near-total blockage of the Strait of Hormuz, a key transit route for about a fifth of global crude output.
While the report lifted optimism for an imminent end to hostilities, the status of the strait remains unresolved. The WSJ reported that Trump told aides he had achieved his military objective even if the waterway remained closed.
An Iranian drone strike on a fully laden Kuwaiti oil tanker off Dubai on Tuesday highlighted heightened tensions.
“One can’t exclude a swift resolution, but it won’t mean going back exactly to where we were in February,” said Kevin Thozet, a member of the investment committee at Carmignac. “Investors are seeing the glass half-full. During the past 15 years or so, buying the dip has been absolutely key.”
In Asia, a slump in chipmakers fueled stock losses after Monday’s rout in US-listed peers. South Korea’s Kospi index slid 4.3 per cent, extending its drop from a February high to 20 per cent. - Bloomberg
