Trading on Tuesday began with high expectations that the Iran war is inching to a close, fuelling gains across major stock markets and pushing oil back under $100 a barrel.
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Investors remained hopeful for a lasting de-escalation of the conflict, now in its seventh week, as the US and Iran are said to be weighing a second round of talks before a temporary ceasefire agreement expires next week.
The US military on Monday began a blockade of Iranian ports as Washington steps up pressure on Tehran, following weekend ceasefire talks between the two sides that ended without agreement.
Trump also suggested on Monday that the United States is still willing to engage with Tehran.
“I can tell you that we’ve been called by the other side,” he said, without elaborating further.
Oil prices continued to pull back on Tuesday from earlier gains.
Brent crude, the international standard, was down 0.8% at $98.62 per barrel, nearing 8 am CET.
It reached nearly $104 early on Monday amid Iran war concerns and limited progress in weekend ceasefire talks.
Benchmark US crude fell 1.7% early Tuesday to $97.40 a barrel.
The global energy shock stemming from maritime traffic disruptions in the Strait of Hormuz, through which roughly a fifth of the world’s oil is typically transported, has led to surging fuel prices and threatens to push up inflation in many countries and weigh on economic growth.
Stock markets are hungry for good news
Investors were quick to recover after the dismal first trading day on Monday. Asian markets were mostly up on Tuesday morning, tracking Wall Street gains.
Tokyo’s Nikkei 225 was up 2.4%, while South Korea’s Kospi jumped more than 3% to 6,004.30.
Hong Kong’s Hang Seng rose 0.4% to 25,759.75, while the Shanghai Composite climbed 0.6% to 4,010.45.
This comes as China on Tuesday reported worse-than-expected export growth.
The world’s second-largest economy expanded its exports by 2.5% in March year on year, significantly slower than the previous two months as uncertainties rose from the Iran war and its impact on energy prices and global demand.
The March data missed analysts’ estimates and was sharply down from the 21.8% export growth recorded in January and February.
Wall Street rose on Monday. The S&P 500 gained 1%, the Dow Jones Industrial Average climbed 0.6% and the Nasdaq Composite added 1.2%.
Shares in Goldman Sachs fell 1.9% despite the investment bank posting better-than-expected quarterly profits.
In other trading, gold and silver prices rose on Tuesday. Gold was up 0.6% at $4,796.60 (€4,219.62) an ounce, while silver gained 1.8% to $77.05 (€67.80) per ounce.
The US dollar fell to ¥159.08 from ¥159.45. The euro was trading at $1.1766, up from $1.1759.