Global stock markets staged a sharp rally on Thursday after US President Donald Trump said he had called off planned strikes against Iran for that night and suggested a peace deal with Tehran could be signed within days, marking a dramatic reversal of the tensions that had been driving markets lower in recent sessions.
Wall Street’s benchmark S&P 500 closed nearly 1.8 per cent higher on Thursday, its biggest single-day gain since April and an end to a three-day losing streak. The tech-heavy Nasdaq Composite climbed 2.5 per cent, while the Dow Jones Industrial Average rose more than 900 points, or 1.86 per cent, to close at 50,848.75. Precious metals including gold and silver also gained, according to FX Leaders, suggesting investors remained cautious even as risk appetite improved.
The rally extended into the Asia-Pacific session on Friday. South Korea’s Kospi, the best-performing major index this year, surged more than 8 per cent in morning trading, while Japan’s Nikkei 225 rose as much as 4 per cent. Taiwan’s TAIEX gained around 2.4 per cent, Australia’s ASX 200 added about 1.8 per cent, and Hong Kong’s Hang Seng Index rose more than 1 per cent.
Oil prices fell on hopes for a return to normal traffic through the Strait of Hormuz, which carries roughly one-fifth of global energy supplies during peacetime. Brent crude, the international benchmark, dropped about 1 per cent to below $89.50 a barrel.
Speaking in the Oval Office, Trump said: “We just made a great settlement of the war with Iran… subject to finalisation of documents.” According to Yahoo Finance, stocks took a further leg higher after Trump cited “discussions” that “have been brought to the highest level of Iranian leadership,” adding that a time and place “of the signing to be announced shortly.” Iran has not publicly confirmed Trump’s account of a settlement, though a Ministry of Foreign Affairs spokesperson told reporters a memorandum of understanding with the US is “under consideration.”
CNBC noted that markets have responded to similar claims from Trump multiple times over the past three months without a deal ultimately materialising, with Deutsche Bank analysts saying in a recent note that “while geopolitical developments continue to draw large oil moves, there is some optimism that the US and Iran will reach a peace deal this month.” Polymarket data shows more than $282 million has been traded on contracts tied to the timing of a permanent US-Iran peace deal, with odds fluctuating sharply in response to Trump’s repeated statements over recent weeks.
The market rally also coincided with a separate, closely watched event in US equities: the trading debut of SpaceX, in what is set to be the largest initial public offering in history.
