Stock Rally Builds on Iran Optimism, Oil Drops: Markets Wrap
(Bloomberg) — Stocks extended gains and oil fell after President Donald Trump said the US was nearing an agreement with Iran, raising expectations for a diplomatic end to the conflict that’s triggered price swings across financial markets for more than 100 days.
MSCI’s Asia Pacific equities gauge jumped 3.5% in its biggest advance in two months, led by an 8.4% surge for South Korea’s Kospi — a barometer for AI investments. Equity-index futures indicated Wall Street benchmarks will add to Thursday’s rally after Trump said the US “ended the war with Iran today.” European shares were set to climb 1.8% at the open.
Investors remain focused on the technology sector ahead of SpaceX’s listing on Nasdaq Friday, after raising $75 billion in the world’s largest initial public offering. Shadow markets are pricing a blockbuster SpaceX stock debut, indicating a pop of at least 35% for Elon Musk’s rocket, satellite and AI company.
Brent crude fell 2% to about $88.50 a barrel as Trump pulled back from threatened military attacks against Iran, citing discussions that have been brought to the highest level of Iranian leadership for a negotiated end to the war. Trump said a signing could take place as soon as this weekend in Europe with Vice President JD Vance in attendance.
“While the path toward a resolution is likely to be uneven, our base case is that diplomacy ultimately prevails, allowing investors to refocus on resilient economic fundamentals and robust earnings growth,” said Ulrike Hoffmann-Burchardi, global equities CIO at UBS Global Wealth Management.
The latest push for a deal buoyed risk sentiment by raising expectations that a broader Middle East conflict will be avoided, shifting attention back to corporate earnings and the artificial intelligence-driven rally. A de-escalation would ease a major overhang for markets, lowering the risk of energy-supply disruptions that may boost oil prices and reinforce higher-for-longer interest rates.
Treasuries held Thursday’s gains, with yield on the 10-year holding at 4.46%.
Trump’s comments had lowered yields across the curve in US trading. Short-term rate contracts that reflect expectations for the Federal Reserve — and had fully priced in a quarter-point increase in the US policy rate by December — shifted the assessment to the first quarter of 2027.
The US president’s pullback from threatened military strikes against Iran was a stark reversal that came just hours after he vowed to hit the Islamic Republic and threatened to seize its oil infrastructure.
Iranian officials had not yet approved the text of any agreement with the US, the nation’s semi-official news agency Fars, said earlier Thursday, citing a source it did not name.
In other corners of the market, a Bloomberg gauge of the dollar edged up 0.1% after four days of declines. Gold gave up some up some of its 3.4% rally on Thursday to trade around $4,190 an ounce.
Meanwhile, investors are bracing for Friday’s listing of SpaceX, the marquee event for equity markets after the world’s largest IPO.
Space Exploration Technologies Corp. was valued at $1.77 trillion at the offer price. Trading in derivatives linked to the stock on online trading platform IG International implied a market value of about $2.4 trillion, signaling expectations for a first-day surge of more than 35%.
The company’s debut is expected to remove a “liquidity overhang” that has weighed on markets and contributed to this week’s retreat in tech stocks, said Billy Leung, an investment strategist at Global X Management. Historically, risk sentiment tends to improve in the near term after a major IPO, Leung said.
“SpaceX is just the opening act,” said Ritesh Ganeriwal, head of investment at Syfe Pte in Singapore. “With Anthropic and OpenAI likely moving toward public markets, we’re entering a rare window where some of the most consequential private companies of the last decade are becoming investable for mainstream investors.”
Corporate Highlights:
Adobe Inc. said that its chief financial officer would depart the company, leaving the company without a top tier of veteran leadership after Chief Executive Officer Shantanu Narayen announced in March that he would step aside. Intel Corp. jumped as Bank of America Corp. turned bullish on the chipmaker and upgraded it to a buy rating. Alibaba Group Holding Ltd. is offering $1.5 billion to acquire Chinese grocery delivery firm Pupu, initiating a bidding war as part of a broader campaign to wrest market share from Meituan in online commerce. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 2:03 p.m. Tokyo time Japan’s Topix rose 1.8% Australia’s S&P/ASX 200 rose 2% Hong Kong’s Hang Seng rose 2.1% The Shanghai Composite rose 1.4% Euro Stoxx 50 futures rose 1.7% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1572 The Japanese yen fell 0.2% to 160.25 per dollar The offshore yuan was little changed at 6.7642 per dollar Cryptocurrencies
Bitcoin rose 0.3% to $63,559.61 Ether rose 0.1% to $1,672.83 Bonds
The yield on 10-year Treasuries was little changed at 4.47% Japan’s 10-year yield declined four basis points to 2.640% Australia’s 10-year yield declined eight basis points to 4.82% Commodities
West Texas Intermediate crude fell 2% to $85.99 a barrel Spot gold fell 0.6% to $4,189.02 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Bernadette Toh, Winnie Hsu, Alice French and Abhishek Vishnoi.
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