Stocks Gain on Hopes for Swift End to Iran War: Markets Wrap

(Bloomberg) — Stocks rose and oil steadied as developments in the Middle East boosted traders’ optimism that the war in Iran could be shorter-lived than initially feared. The dollar slid after two days of haven-driven gains.

S&P 500 futures advanced 0.3% after swinging between gains and losses. Brent crude dipped toward $81 a barrel. A selloff in global bonds eased, with the yield on 10-year Treasuries little changed at 4.06%. The dollar dropped 0.2%. Bitcoin topped $71,000.

Sentiment received a boost after the New York Times reported that Tehran had made indirect contact with the US to negotiate an end to the conflict, even though officials were skeptical that either Iran or the Trump administration was ready for an off-ramp. Defense Secretary Pete Hegseth said US and Israel had full control of Iranian airspace.

Markets have endured days of volatility after the attack on Iran destabilized the Middle East, disrupting energy supplies and damaging infrastructure. The focus remains on crude after President Donald Trump pledged that the US would insure and escort tankers passing through the Strait of Hormuz, where a container ship was hit Wednesday while transiting the waterway.

“We’re in a headline market,” said Guillermo Hernandez Sampere, head of trading at asset manager MPPM. “Rapid movements with higher volatility will remain for a longer period until supply chains are secure again. It will take some time to calm markets.”

Treasury Secretary Scott Bessent told CNBC that Trump’s plan to raise the 10% universal tariff to as much as 15% would likely be implemented this week, bringing trade tensions back into focus. Officials are considering other legislation to reinstate the regime that was in place before the Supreme Court ruling, he said.

Earlier, Asia’s benchmark index plunged the most in nearly a year, led by a record selloff in South Korean equities. While the US is relatively immune as a “gigantic energy superpower,” according to Barclays Plc’s global chairman of research Ajay Rajadhyaksha, Asian economies such as China, South Korea and Japan are more dependent on oil flows from the Middle East.

What Bloomberg Strategists say…

“The turn higher in risk sentiment after the New York Times report looks precarious given investors have plenty of reasons to be cautious. The report itself says that US officials are skeptical, and the outreach it mentions happened days ago. Such doubts are evident in the measured pullback in oil.”

— Conor Cooper, Macro Squawk. Click here to read the full analysis.

Mohit Kumar, chief strategist for Jefferies in Europe, said the firm’s US clients are generally more optimistic than those in Europe and Asia. The gap reflects US investors’ greater focus on Trump’s actions, which could lead them to underestimate Iran’s response.

For Aneeka Gupta, director of macro-economic research at Wisdomtree, the real test for markets will be whether oil and the dollar remain higher long enough to significantly change the behavior of central banks.

“If the shock is short-lived, energy settles, and dollar strength doesn’t become persistent, then the macro impact is mostly a risk premium event — volatility up, but growth intact,” she said.

Corporate News:

Airlines around the globe are suspending more flights to additional destinations across the Middle East as the expanding war moves into its fifth day. Bayer AG forecast profits and sales to be little changed in 2026 as the company grapples with generic competition for its blockbuster blood thinner and continued uncertainty over its efforts to contain a pesticide litigation in the US. Adidas AG shares tumbled to a three-year low after the sportswear maker’s earnings forecast disappointed investors hoping for bigger profits from the German brand. Anthropic PBC is on track to generate annual revenue of almost $20 billion, a projection based on current performance, more than doubling its run rate from late last year. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 1.6% as of 1:40 p.m. London time S&P 500 futures rose 0.3% Nasdaq 100 futures rose 0.5% Futures on the Dow Jones Industrial Average rose 0.3% The MSCI Asia Pacific Index fell 3.8% The MSCI Emerging Markets Index fell 3.5% Currencies

The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.2% to $1.1640 The Japanese yen rose 0.4% to 157.15 per dollar The offshore yuan rose 0.3% to 6.8961 per dollar The British pound was little changed at $1.3368 Cryptocurrencies

Bitcoin rose 5% to $71,416.01 Ether rose 4.7% to $2,061.75 Bonds

The yield on 10-year Treasuries was little changed at 4.06% Germany’s 10-year yield was little changed at 2.75% Britain’s 10-year yield declined four basis points to 4.43% Commodities

Brent crude fell 0.4% to $81.07 a barrel Spot gold rose 1.9% to $5,183.85 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Tiwa Adebayo and Macarena Muñoz.

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