Asian Stocks Rebound and Oil Prices Fall as Iran Ends Attacks on Israel

Asian stocks rebounded on Tuesday after Iran said it was ending its attacks on Israel, easing some of the immediate fear that had rattled markets a day earlier. Oil prices also fell back from their earlier highs, as investors moved away from the most defensive positions after the announcement of de-escalation.

The recovery followed a volatile Monday session, when renewed fighting between Iran and Israel sent markets into a risk-off mood. According to asharq al-awsat, Brent crude briefly surged by more than 5% after the exchange of fire, before giving up most of those gains later in the day when Iran announced the cessation of its attacks on Israel.

The shift in sentiment was reflected across Asian markets. As reported by asharq al-awsat, regional stocks recorded a rebound in Tuesday trading after the de-escalation announcement, reversing some of the losses linked to the surge in Middle East tensions. The Nikkei had already fallen sharply on Monday, marking its biggest drop in three months, while the yen strengthened past 160 to the dollar as investors sought safer assets.

The impact was not limited to Asia. European shares also came under pressure on Monday, with the Stoxx 600 dropping to a two-week low amid the regional tensions and a separate sell-off in artificial intelligence stocks, according to asharq al-awsat. Gulf markets likewise declined in early Monday trading as investor sentiment weakened across the region.

Oil remained a key focus for traders because any sustained escalation between Iran and Israel could threaten supplies from a major energy-producing region. On Tuesday, prices were still moving cautiously: asharq al-awsat reported a slight rise in early trading as markets waited for clearer signs that the ceasefire-like pause would hold, even after Monday’s sharp swings.

For investors, the next question is whether the de-escalation can last long enough to calm energy markets and restore broader confidence in global equities. The rapid reversals in both stocks and oil underscored how sensitive markets remain to developments in the Middle East, especially when the risk is not just geopolitical but also tied to global inflation and fuel costs.