Stock markets rise as Trump calls off strikes on Iran, hints at peace deal | Financial Markets

Wall Street and Asian markets are facing the prospect of an end to the US-Israel war on Iran.

Financial markets have rallied following US President Donald Trump’s announcement that he will suspend planned protests against Iran and that a peace deal with Tehran is close.

Wall Street’s benchmark S&P500 index ended up about 1.8 percent on Thursday, snapping a three-day streak for the biggest one-day gain since April.

The tech-focused Nasdaq Composite jumped 2.5 percent, while the broad, blue-chip Dow Jones Industrial Average gained about 1.9 percent.

The rally continued in the Asia Pacific on Friday, as markets in Japan, South Korea, Taiwan, Hong Kong, and Australia posted gains.

South Korea’s Kospi, this year’s best performer, rose more than 8 percent in morning trade, while Japan’s benchmark Nikkei 225 rose as much as 4 percent.

Taiwan’s TAIEX gained about 2.4 percent, and Australia’s ASX 200 rose about 1.8 percent.

In Hong Kong, the Hang Seng Index was up more than 1 percent.

Brent crude, the world’s leading benchmark for oil prices, fell nearly 1 percent to below $89.50 a barrel on expectations of a return to normal in the Strait of Hormuz, which in peacetime carries a fifth of the world’s energy.

The market rebound came after Trump on Thursday hinted that a deal to end the war with Iran could be signed as soon as this week.

“We just ended the war with Iran … until the end of the document,” Trump told reporters in the Oval Office of the White House.

Iran has not publicly confirmed Trump’s claims, but a Foreign Ministry spokesman told reporters that a memorandum of understanding with the US was “under consideration”.

“For the summit to go ahead, investors don’t want to see the actual deal, but the full reopening of the Strait of Hormuz,” Khoon Goh, head of Asia research at ANZ Bank, told Al Jazeera.

“Only then will we see the benefits grow.”

Fabien Yip, a market researcher at the IG Group of the Internet in Sydney, Australia, said that the meeting shows “a reasonable reduction of the political risk”, and is looking forward to the launch of the SpaceX market on Friday, which will be the largest in history.

“What counts in today’s Asian results is that the purchasing power is real,” Yip told Al Jazeera.

“It depends on how you reflect on what happened last week.

“This doesn’t look like the end of a bull market and more like a recovery after a quick, focused advance, the kind of consolidation that will lead to the longevity of the rally.”