Asian Stocks Rebound as US-Iran Ceasefire Deal and Strait Reopening Boost Optimism
Asian stock markets showed a rebound on Thursday, fueled by investor optimism over a potential peace agreement in the ongoing US-Iran conflict and bolstered by strong corporate earnings results. U.S. stock futures edged higher as confidence grew that the worst of the Middle East escalation might be over, according to reports from Asharq Al-Awsat. This positive sentiment rippled across regions, with European stocks also rising slightly amid hopes for de-escalation in the conflict.
In the Gulf, markets presented a mixed picture during early trading, as investors closely watched developments toward a possible deal to end the Iran-linked war. Dubai's main share index advanced 1.4%, driven by a 2.1% rise in blue-chip developer Emaar Properties and Tecom Group, while budget airline Air Arabia climbed 1.2% after reversing early losses. Abu Dhabi's index added 0.3%, but Saudi Arabia's benchmark fell 0.2%, weighed down by a 2.1% drop in Saudi National Bank and a 0.3% decline in oil giant Saudi Aramco, as noted in Zawya and Asharq Al-Awsat coverage.
Asia-Pacific markets traded mixed but volatile, reacting to escalating rhetoric from U.S. President Donald Trump on negotiations and the critical Strait of Hormuz. Sharp swings saw major indexes reverse morning gains into losses, with investor sentiment hinging on statements from Washington and Tehran about a framework to resolve the five-week-old conflict, per CNBC analysis in market updates.
The backdrop involves a last-ditch ceasefire deal between the U.S. and Iran, including Tehran's pledge to reopen the Strait of Hormuz—a vital chokepoint for global oil supplies. Trump announced the two-week truce after pressure from mediator Pakistan, easing fears of further devastation, though the exact start date remained unclear amid reports of lingering hostilities in the Persian Gulf. Brent crude futures held steady around $94.67 per barrel, reflecting skepticism that talks would fully end disruptions, while other reports noted prices climbing to $111 amid supply concerns.
This matters deeply for global markets, as the Strait of Hormuz handles about 20% of the world's oil trade, and any prolonged closure threatens energy prices and economic stability worldwide. Gulf economies, heavily reliant on oil exports, face the most direct impact, with investors balancing ceasefire hopes against failed prior talks and U.S. maritime measures. Strong corporate results provided additional support, helping offset geopolitical jitters.
Looking ahead, markets will scrutinize whether the ceasefire holds and if Iran pauses its blockade, as Trump conditioned the deal on that step. Further U.S. pressure on Tehran ahead of talks could sway sentiment, with traders eyeing upcoming negotiations for signs of lasting de-escalation. Regional bourses remain sensitive, potentially rebounding further if peace progress solidifies.