Stock markets surge as Trump calls off strikes on Iran, touts peace deal

Stock markets on Wall Street and across Asia surged after US President Donald Trump said he had called off planned strikes against Iran and that a peace deal with Tehran was imminent. On Thursday, the benchmark S&P 500 finished nearly 1.8% higher, ending a three-day losing streak and posting its biggest single-day gain since April. The tech-heavy Nasdaq Composite jumped 2.5%, while the blue-chip Dow Jones Industrial Average gained about 1.9%.

The rally continued in Asia Pacific on Friday, with markets in Japan, South Korea, Taiwan, Hong Kong, and Australia posting gains. South Korea’s Kospi, the best-performing major index this year, surged more than 8% in morning trading, while Japan’s Nikkei 225 rose as much as 4%. Taiwan’s TAIEX gained about 2.4%, Australia’s ASX 200 rose 1.8%, and Hong Kong’s Hang Seng Index was up over 1%.

Oil prices fell, with Brent crude dropping about 1% to below $89.50 a barrel on hopes for a return to normalcy in the Strait of Hormuz. Trump told reporters on Thursday that a deal to end the war on Iran could be signed as soon as this weekend. “We just made a great settlement of the war with Iran… subject to finalization of documents,” he said. Iran has not publicly confirmed the claims, but a foreign ministry spokesman said a memorandum of understanding with the US is “under consideration.”

Khoon Goh, head of Asia research at ANZ Bank, said that for the rally to be sustained, investors will want to see not only the deal signed but also a complete reopening of the Strait of Hormuz. Only then, he said, will gains extend. Fabien Yip, a market analyst at IG Group in Sydney, said the rally reflected a “meaningful easing of geopolitical risk” as well as anticipation of SpaceX’s market debut, set to be the largest in history. “This looks less like a structural break in the bull market and more like a healthy reset after a rapid advance,” he added.