Asian stocks fluctuate as Iran rejects ceasefire conditions

In Short:
– Asian stocks fluctuated as Iran set ceasefire conditions and rejected a U.S. proposal.
– Wall Street initially rallied but gains faded amid ongoing Middle Eastern conflict.

Asian stocks fluctuated as Iran set five conditions for a ceasefire.On Wall Street, stocks rallied on Wednesday, but gains faded as Iran rejected a U.S. ceasefire proposal amidst ongoing conflict in the Middle East.

Market developments

The S&P 500 gained 0.5% to close at 6,591.90, while the Dow Jones Industrial Average rose 305 points, or 0.66%, to 46,429.49, according to the Associated Press.

The Nasdaq Composite increased 0.77% to finish at 21,929.83.

Stocks initially surged over 1% before retreating after Iran’s foreign ministry dismissed U.S. claims of negotiations as deceitful.

Asian markets jumped on ceasefire optimism, with Japan’s Nikkei 225 rising 2.9%, South Korea’s Kospi increasing 3.1%, and Australia’s ASX 200 climbing 2%.

European indexes also recorded gains exceeding 1%.

By Thursday, Asian stocks struggled as conflicting signals emerged.

Oil prices fell sharply after the ceasefire proposal, with Brent crude dropping below $100 per barrel before settling around $98, as reported by The Wall Street Journal.

U.S. West Texas Intermediate fell 2.2% to $90.32.

Despite the dip, Brent remains up about 42% for the month amid supply disruptions in the Strait of Hormuz.

The 15-point ceasefire plan proposed by the U.S. includes a temporary ceasefire window and conditions set by Iran, including halting hostilities and international recognition of its sovereignty over the Strait.

Iran’s foreign minister indicated Tehran is reviewing the American proposal but will not participate in direct talks.

Economic impact

The ongoing conflict’s economic toll is becoming apparent.

Goldman Sachs increased its recession probability to 30%, while Moody’s Analytics assessed it at 48.6%, due to rising energy costs and inflation risks.

U.S. import prices rose by 1.3% as energy costs surged, with gas prices climbing from approximately $3.40 to nearly $4.20 per gallon since the conflict began.

Treasury yields eased on Wednesday, with the 10-year note dropping to 4.33%.