US indices rallied on Tuesday, with the S&P 500 up 1.2%, the Nasdaq gaining nearly 2%, and the Dow rising 0.7%. The move extended a strong winning streak. the S&P has now fully recovered the losses triggered by the Iran conflict earlier this year. S&P 500 is now within 1% of its all-time high.
Investor sentiment has improved on hopes that a U.S.–Iran agreement may still be possible, after comments from President Donald Trump and reports that a second round of negotiations is being discussed. While optimism is supporting equities, it’s important to note that geopolitical risks have not fully disappeared.
Attention now turns to the next catalysts for markets, including major earnings reports from companies such as Bank of America, Morgan Stanley, and ASML.
Oil prices rose in volatile trading on Wednesday, recovering from earlier losses after a sharp decline in the previous session. The rebound came as markets reacted to growing optimism that the Middle East conflict could move toward a diplomatic resolution.
Asia-Pacific markets opened higher today, supported by lower oil prices and growing hopes of a potential U.S.–Iran diplomatic deal. Regional markets broadly advanced, with strong gains in South Korea, while Japan, Australia, China, and Hong Kong also moved higher. The rally reflected improved risk appetite as falling energy prices reduced concerns over inflation and economic pressure.
Gold pulled back from a near four-week high, slipping toward the $4,800 area as the US dollar recovered modestly amid renewed geopolitical tensions surrounding the Strait of Hormuz and the U.S. blockade on Iran.
Despite the pullback, downside pressure remains limited because markets are still hopeful that U.S.–Iran diplomacy could resume, while easing expectations for Fed rate hikes continue to weigh on the dollar.
Weaker-than-expected U.S. Producer inflation data and lower bond yields also support gold, suggesting buyers may return on dips even as short-term volatility remains elevated.
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