Stock Rally Stumbles as Oil’s Rebound Damps Mood: Markets Wrap
(Bloomberg) — Stocks declined and oil rose as optimism over the US-Iran ceasefire faded after Tehran said several terms of the agreement had been breached, highlighting lingering uncertainty in markets.
MSCI’s Asia Pacific equity gauge fell 1% after Iranian Parliament Speaker Mohammad-Bagher Ghalibaf said three clauses of the ceasefire proposal have been contravened so far. Stocks had rallied around the world on Wednesday — with the Asian index jumping the most in a year — on optimism the ceasefire deal would help ease the flow of crude oil and support economic growth.
Weighing on sentiment was Brent crude, which rose 3% to $97.64 a barrel — rebounding from its worst plunge in more than six years. Stock futures for Wall Street and European gauges fell 0.3%
Treasuries were a touch weaker after wiping out an early rally in the US session. Government bonds in Japan and Australia also retreated on concern higher oil prices will fan inflation. The dollar, which emerged as the haven of choice during the conflict, gained against almost all of its Group-of-10 peers.
The whipsaw trading highlights how tentative sentiment remains after a cross-asset relief rally sparked by Washington’s pledge to halt strikes on Iran for two weeks and pursue talks with the Islamic Republic. Israeli attacks in Lebanon threatened to derail the ceasefire in the six-week conflict, which has already roiled energy markets with the effective closure of the Strait of Hormuz, a key artery for oil flows from the Middle East.
“The fragility of the ceasefire is already being tested with reports Iran closed the Strait of Hormuz in response to attacks on Lebanon by Israel,” Peter Dragicevich, an Asia Pacific currency strategist at Corpay Solutions in Sydney, wrote in a note. “The situation in the Middle East has relatively improved, but things remain fluid and given the volatile participants involved it could deteriorate at any time.”
Bloomberg’s gauge of the dollar rose 0.1%, while Bitcoin dropped 0.9% to below $71,000.
Asian technology stocks followed US peers lower after Meta Platforms Inc. unveiled a new artificial intelligence model and Anthropic launched Claude tools for building agents.
Sporadic fighting continued throughout the Middle East, including in Lebanon, where Israel continued its campaign against the Iran-aligned Hezbollah militia. Iranian officials cast that as violating the terms of the less than a day-old ceasefire.
Meanwhile, a key Saudi oil pipeline to the Red Sea suffered limited damage from an earlier drone strike on one of its pumping stations, and crude flows continued, according to people familiar with the matter.
“Much will depend on adherence to the ceasefire and progress in negotiations, and it will be difficult to return to the pre-conflict status quo,” said Yiping Liao, a portfolio manager at Templeton Global Investments. “While this may mark a floor for further escalation, risks remain elevated.”
A wave of optimism had swept through global financial markets Wednesday, boosting stocks and cryptocurrencies while spurring a selloff in oil after the US and Iran reached a ceasefire deal. The rebound in risk appetite drove the S&P 500 Index up 2.5% and revived bets the Federal Reserve will cut interest rates in 2026.
What Bloomberg Strategists say…
“All in, markets appear to have merely returned to pre-Iran dynamics, where fundamentals don’t necessarily support an extended rally. The price action looks to be helped mightily by algorithmic and momentum strategies, rather than the beginnings of an enduring base for higher asset prices.”
— Edward Harrison, Macro Strategist, Markets Live. For the full analysis, click here.
Traders are still focused on the Strait of Hormuz and whether energy flows will resume through the waterway.
The strait remained largely blocked on Wednesday, as shipowners try to understand if they can safely transit the vital waterway following a fragile ceasefire between the US and Iran that was announced overnight. Just three ships were observed leaving the region on Wednesday, according to ship-tracking data compiled by Bloomberg.
“The trouble with ceasefires is that they often require both sides to agree to a set of terms, and then actually cease fire,” said Molly Schwartz, a cross-asset macro strategist at Rabobank. “However, if the set of terms are not comprehensively established and neither side can be held accountable to pause hostilities, then the so-called ‘ceasefire’ loses all meaning.”
Corporate Highlights:
Delta Air Lines Inc. expects to incur more than $2 billion in higher fuel costs through June because of the Iran war, prompting the carrier to tread carefully and stick to its previous full-year profit forecast. Exxon Mobil Corp. lost 6% of its global production in the first quarter as the Iran war paralyzed oil and natural gas operations in the Persian Gulf. Meta Platforms Inc. debuted its latest artificial intelligence model — its first since Chief Executive Officer Mark Zuckerberg embarked on an overhaul of the company’s AI organization to keep pace with rivals. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 10:38 a.m. Tokyo time Nikkei 225 futures (OSE) fell 0.7% Japan’s Topix fell 0.7% Australia’s S&P/ASX 200 was little changed Hong Kong’s Hang Seng fell 0.8% The Shanghai Composite fell 0.7% Euro Stoxx 50 futures fell 0.3% Currencies
The Bloomberg Dollar Spot Index rose 0.1% The euro was little changed at $1.1658 The Japanese yen fell 0.2% to 158.84 per dollar The offshore yuan was little changed at 6.8351 per dollar Cryptocurrencies
Bitcoin fell 0.9% to $70,752.26 Ether fell 1.6% to $2,173.95 Bonds
The yield on 10-year Treasuries was little changed at 4.30% Japan’s 10-year yield advanced three basis points to 2.395% Australia’s 10-year yield advanced eight basis points to 4.94% Commodities
West Texas Intermediate crude rose 3.6% to $97.78 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Ruth Carson, Sangmi Cha, Richard Henderson and Rong Wei Neo.
©2026 Bloomberg L.P.
