The news of a ceasefire between Iran and Israel sparked a rally in Asian stocks. This came after US President Donald Trump announced that the two countries had agreed to stop fighting. As a result, the price of oil plummeted, easing concerns about supply disruptions.
In Asia, stock futures surged. The S&P 500 futures jumped 0.3%, while the Nasdaq futures rose 0.5%. The Nikkei futures also climbed, reaching 38,905 points, surpassing the previous day’s closing level of 38,354 points.
The US dollar, on the other hand, lost value. It fell 0.1% to 145.92 yen, while the euro gained 0.1% to $1.1589. This shift was largely driven by the sharp drop in oil prices, which benefited countries that rely heavily on oil imports, such as Japan and the European Union.
The ceasefire announcement also impacted the US bond market. The 10-year Treasury yield fell, as investors became less risk-averse. Additionally, interest rate futures dipped slightly, indicating that the Federal Reserve might slow down its rate cuts.
The US stock market had already shown signs of optimism on Monday, following comments from Michelle Bowman, a Federal Reserve official, suggesting that the time to cut interest rates might be near. This was due to concerns about rising job market risks.
Oil prices continued to tumble, with US crude oil futures falling 4% to $65.75 a barrel. This followed a 9% drop on Monday, after Iran’s symbolic retaliation against US bases resulted in no significant damage, and Tehran signaled that it would not escalate further.
The source of this information is Channel NewsAsia.