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Markets waver as Trump signals imminent endgame in Iran conflict

Global financial markets have entered a phase of heightened uncertainty as Donald Trump indicated that the ongoing conflict with Iran may be nearing its conclusion, while warning of intensified military action in the short term. His remarks, delivered in a televised White House address, have prompted divergent reactions across regions, with investors balancing cautious optimism over a potential de-escalation against concerns about continued volatility in energy markets, supply chains and geopolitical risk.

  • Date
  • Author Dominique Stutz, Content and Publications Editor
  • Reading time 5 minutes

White House speech
© Shutterstock

US President Donald Trump said in a televised White House address on Wednesday night that the Iran war, launched with Israel at the end of February, is likely to continue for another two to three weeks but is "close to its end", highlighting the claimed successes of Operation Epic Fury. Financial markets reacted negatively during the speech, with both oil and equity prices weakening even as Brent crude traded around USD 100 per barrel and US gasoline prices averaged about USD 4.06 per gallon after breaching the USD 4 mark on Tuesday for the first time since the conflict began. The address came as Israel continued to strike targets in Tehran despite Washington’s signalling of an approaching wind-down of operations.

Asia-Pacific stocks retreat as investors reassess Trump remarks

Asia-Pacific equity markets turned lower on Thursday as investors reassessed risk following US President Donald Trump’s televised address on the Iran war late on Wednesday, in which he reiterated that US objectives were almost achieved but warned of "very hard" strikes over the next two to three weeks. The region’s losses were led by South Korea’s Kospi, which dropped about 5.5%, while Japan’s Nikkei 225 fell roughly 2.6%. Australia’s S&P/ASX 200, Hong Kong’s Hang Seng index and mainland China’s Shanghai benchmarks also slipped between about 1.1% and 1.5% after opening in positive territory, as the initial optimism seen in US and European trading gave way to a more cautious interpretation of Trump’s comments. 

US stocks extend gains on Iran de-escalation hopes

Major US equity indices advanced on Wednesday as investors responded to renewed hopes that US military operations against Iran could end within the next two to three weeks, ahead of a primetime address by President Donald Trump later in the day. The Dow Jones Industrial Average rose 0.5% to 46,565.74 points, the broad S&P 500 gained 0.7% to 6575.32 points and the technology-heavy Nasdaq 100 climbed 1.2% to 24,019.99 points, with economically sensitive technology and semiconductor stocks outperforming on expectations that an eventual reopening of the Strait of Hormuz would improve helium supplies. Energy shares lagged as oil prices fell, with Occidental Petroleum, Chevron and Exxon Mobil losing between just over 4% and more than 5%. Individual stock moves were mixed, as sportswear group Nike slumped 15.5% after warning of revenue declines linked to the conflict and furniture retailer RH dropped more than 19% on a weak sales outlook, while pharmaceutical company Eli Lilly gained almost 4% after US regulators approved its new weight-loss pill.

Stronger US factories and steady job gains

US manufacturing activity strengthened in March, with the Institute for Supply Management’s manufacturing PMI rising to 52.7 from 52.4 in February, marking a third consecutive month in expansion territory, according to data released on Wednesday. The survey highlighted intensifying price pressures and delivery bottlenecks, as the prices paid index climbed to 78.3 from 70.5, the highest since June 2022, and the supplier deliveries index rose to 58.9 from 55.1, with economists linking these moves to war-related disruptions to shipping through the Strait of Hormuz and a more than 50% jump in global crude prices since the conflict began at the end of February. US private sector employment increased by 62,000 in March after a revised gain of 66,000 in February, according to the ADP national employment report released on Wednesday. The outcome exceeded economists’ expectations for a smaller rise and comes ahead of the official Bureau of Labor Statistics labour market report for March, which will be published on Friday.

European stocks gain on hopes of easing Iran tensions

Key European equity indices rose strongly on Wednesday as investors reacted positively to signs of a possible easing of tensions in the Iran conflict, after US President Donald Trump suggested airstrikes could end within the next two to three weeks. The euro-area blue-chip index EuroStoxx 50 advanced 3% to 5739.60 points, while Switzerland’s SMI added 1.6% to 12,986.15 points. Market commentators noted that sentiment has improved but remains cautious, with unresolved geopolitical risks and the potential for renewed military escalation limiting enthusiasm. Oil and gas shares were the only major sector in negative territory amid slightly lower but still elevated oil prices, while banks and travel-related stocks, including Unicredit and Air France-KLM, outperformed and UK homebuilder Berkeley Group slumped almost 10% after lowering its medium-term profit outlook.

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Editor: Alessandro Fezzi
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