Stocks advance as Iran-Israel ceasefire steadies nerves; oil pares early plunge

Stocks extended their broad rebound on Wednesday after Iran and Israel agreed to halt hostilities, ending 12 tense days in the Middle East and easing fears of a wider regional conflict. The truce, brokered by Washington, followed U.S. strikes that, according to President Donald Trump, “completely destroyed” Iranian nuclear sites.

Israel’s government said it had met all its military objectives and called the outcome a “historic victory.” The easing of geopolitical risk helped propel gains across most Asian bourses: Hong Kong, Shanghai, Sydney and Singapore rallied, while Tokyo slipped modestly.

Crude prices, which had tumbled on news of the ceasefire, clawed back more than 1 percent but remained roughly 16 percent below Monday’s war-panic peak.

Adding to the upbeat mood, Federal Reserve Chair Jerome Powell signaled openness to lowering interest rates if inflation stays subdued, telling U.S. lawmakers that policymakers could “cut rates sooner rather than later” should price pressures remain contained. Similar remarks this week from Fed governors Christopher Waller and Michelle Bowman bolstered expectations of a move as early as next month.

Rate-cut bets dragged the dollar lower, leaving it soft versus the yen, pound and euro in early Asian trading.

“Risk appetite roared back to life,” said Stephen Innes of SPI Asset Management. “With the ceasefire—fragile as it is—calming headlines, investors abandoned safe havens and rushed into equities, while oil’s retreat and dovish Fed talk turbo-charged the rally.”

For now, markets appear intent on banking the relief, even as traders keep a wary eye on whether the ceasefire can endure.

Key figures at around 0230 GMT

Tokyo - Nikkei 225: DOWN 0.1% at 38,750.47 (break)
Hong Kong - Hang Seng Index: UP 0.8% at 24,373.72
Shanghai - Composite: UP 0.1% at 3,422.31
West Texas Intermediate: UP 1.3% at $65.23 per barrel
Brent North Sea Crude: UP 1.3% at $68.00 per barrel
Euro/dollar: UP at $1.1629 from $1.1625 on Tuesday
Pound/dollar: UP at $1.3628 from $1.3616
Dollar/yen: DOWN at 144.69 yen from 144.89 yen
Euro/pound: UP at 85.33 pence from 85.24 pence
New York - Dow: UP 1.2% at 43,089.02 (close)
London - FTSE 100: FLAT at 8,758.99 (close)