(Bloomberg) — Stocks rose as investors cautiously returned to equities on signs the six-week-old Middle East conflict may be contained after a report that Iran is pushing for a ceasefire. Crude oil pared gains.<\/p>\n
The MSCI Asia Pacific Index rose 0.3%, with advancers and decliners evenly matched in the benchmark, while technology stocks outperformed. Futures contracts for the S&P 500 Index erased earlier losses to trade 0.1% higher.<\/p>\n
Aiding sentiment was an Axios report that the US, Iran and a group of regional mediators are discussing the terms for a potential 45-day ceasefire that may lead to a permanent end to the war. Reports that more ships passed through the Hormuz Strait also helped even as President Donald Trump issued increasingly aggressive threats to destroy Iran\u2019s power plants starting Tuesday.<\/p>\n
\u201cAsian markets in particular tend to react quickly to any sign that worst-case scenarios, like a full disruption of oil flows, might be avoided,\u201d said Tareck Horchani, head of sales trading prime brokerage at Maybank Securities. \u201cThat\u2019s why you\u2019re seeing a modest rebound, especially in sectors like semiconductors and cyclicals.\u201d<\/p>\n
Traders are seizing on any headline that may affect sentiment after the Iran war darkened the outlook and stoked inflation concerns, roiling expectations for Federal Reserve interest-rate cuts. Attention remains firmly on energy prices and the closure of the Strait of Hormuz, a key artery for Middle East oil flows.<\/p>\n
Trump, in renewing his threats to target Iran\u2019s civilian infrastructure, told Axios that he would be \u201cblowing up everything over there\u201d if Iran doesn\u2019t make a deal. Trump said he plans a news conference at 1 p.m. local time on Monday and posted about a Tuesday 8 p.m. deadline, without offering details.<\/p>\n
\u201cThe prediction game remains quite tricky for investors,\u201d said Homin Lee, a strategist at Lombard Odier in Singapore. \u201cInvestors\u2019 focus will squarely be on military actions on both sides of the Persian Gulf and whether or not Hormuz vessel crossings can improve further despite these attacks.\u201d<\/p>\n
What Bloomberg\u2019s Strategists Say…<\/p>\n
\u201cTraders are focusing on a report that US, Iran and regional mediators are discussing terms for a potential 45-day ceasefire. That shows how keen investors are to see a de-escalation in the Iran war, which is dominating a risk aversion theme across markets. Should President Trump push back against ceasefire hopes when he speaks later on Monday, this positive mood will reverse. But for now, amid thin liquidity, it is the main story for investors to get stuck into.\u201d<\/p>\n
\u2014 Mark Cranfield, Markets Live strategist. Click here for the full analysis.<\/p>\n
In other corners of the market, gold fell 1% to about $4,630 an ounce and silver dropped 1.5% to around $72 an ounce. Bullion has slumped more than 12% since the conflict began in late February, as spiking energy prices have stoked fears of inflation and reduced the prospects for rate cuts that typically benefit non-yielding precious metals.<\/p>\n
Financial markets are shut in a number of Asia-Pacific economies Monday, including China, Hong Kong and Australia. Many European markets are also closed.<\/p>\n
Control of Hormuz \u2014 which connects the Persian Gulf to wider markets, especially across Asia \u2014 remains central to the conflict. Tehran has imposed its authority over the waterway, permitting just a small number of vessels to pass through, including in recent days a French container ship and Japanese-owned tanker, as well as vessels from Malaysia and Pakistan.<\/p>\n
The Foreign Ministry in Oman \u2014 which sits across the strait from Iran \u2014 said in a post on X on Sunday it discussed with Iran options to ensure \u201csmooth flow\u201d through the waterway. Both sides presented proposals for study, it said.<\/p>\n
A total of 16 ships have crossed the strait since Saturday morning, with 11 exiting the Gulf and five entering from the open seas, vessel-tracking data show. That\u2019s still a fraction of the usual traffic.<\/p>\n
Traders will now turn their attention to the Monday press conference of Trump.<\/p>\n
The president has previously dialed back his escalation threats, including two weeks ago before markets reopened for the week.<\/p>\n
\u201cMarkets may be running ahead of diplomacy again,\u201d said Charu Chanana, strategist at Saxo Capital Markets in Singapore. \u201cTrump\u2019s language over the weekend had suggested diplomacy was being pushed out the door, so there is still a real risk that markets are pricing the hope of de-escalation faster than the political reality can deliver it.\u201d<\/p>\n
Some of the main moves in markets:<\/p>\n
Stocks<\/p>\n
Currencies<\/p>\n
The Bloomberg Dollar Spot Index was little changed<\/p>\n
The euro was little changed at $1.1520<\/p>\n
The Japanese yen was little changed at 159.59 per dollar<\/p>\n
The offshore yuan was little changed at 6.8858 per dollar<\/p>\n
Cryptocurrencies<\/p>\n
Bitcoin rose 2% to $69,020.63<\/p>\n
Ether rose 2.9% to $2,127.43<\/p>\n
Bonds<\/p>\n
The yield on 10-year Treasuries advanced one basis point to 4.35%<\/p>\n
Japan\u2019s 10-year yield advanced three basis points to 2.410%<\/p>\n
Australia\u2019s 10-year yield was unchanged at 5.04%<\/p>\n
Commodities<\/p>\n
West Texas Intermediate crude fell 0.4% to $111.11 a barrel<\/p>\n
Spot gold fell 0.7% to $4,644.39 an ounce<\/p>\n
This story was produced with the assistance of Bloomberg Automation.<\/p>\n
–With assistance from Alice French, Kentaro Tsutsumi and Ruth Carson.<\/p>\n