Markets Swing Ahead of Iran Deadline, Asian Stocks Gain Limited Gains
Financial markets swung ahead of US President Donald Trump's deadline on Iran on Tuesday (April 7) at 8 p.m. Eastern Time. Tentative signals of a ceasefire provided support, but the risk of escalating conflict maintained volatility across assets.
Brent oil prices pared early gains and returned to trading just below US$110 per barrel, reflecting market caution ahead of the deadline. On the equity front, US stock index futures erased early losses and briefly moved nearly flat, in line with the rapid shift in sentiment.
Asian markets opened higher, with the MSCI Asia Pacific Index rising 0.7%, driven by gains in South Korea. Technology stocks led the way as they are seen as relatively resilient to the impact of conflict in the Middle East, including Samsung Electronics, which rose 1.5% after its profits reportedly surged eightfold.
Trump said talks with Iran were "going well," but emphasized that freedom of navigation in the Strait of Hormuz must be part of any agreement. He also warned of consequences if Iran does not accept the US's conditions, reinforcing the geopolitical risk premium that still looms over the market.
Iran, through mediator Pakistan, reportedly rejected the ceasefire proposal and demanded a permanent end to the war, the lifting of sanctions, and reconstruction, including protocols for safe shipping through Hormuz. Meanwhile, market participants' attention is shifting to the release of key inflation data this week as a determinant of monetary policy expectations.
Data released Monday showed the US services economy slowed in March, with the largest job loss since 2023 and an acceleration in input prices. The combination of geopolitical risks and mixed macro signals has led the market to adopt a wait-and-see approach, while some players believe economic fundamentals and profit prospects remain supportive, and there are indications that systematic investors may increase their stock exposure again after previously trimming their positions.
S&P 500 futures: -0.1% (9:35 a.m. Tokyo)
Nikkei 225 futures (OSE): +0.7%
Topix: +0.8%
Australia S&P/ASX 200: +2.1%
Euro Stoxx 50 futures: +0.9%
5 Key Points:
- Markets fluctuated ahead of Trump's Tuesday 8:00 p.m. ET deadline on Iran.
- Brent held below US$110, indicating the market remains sensitive to the risk of escalation.
- Asian markets rose (MSCI Asia Pacific +0.7%), led by technology stocks; Samsung +1.5%.
- Iran reportedly rejected the ceasefire proposal and included demands related to Hormuz among its conditions.
- Investors await inflation data this week; recent data showed US services slowing with rising input prices, influencing Fed interest rate expectations. (asd)
Source: Newsmaker.id
