Stocks were mixed on Monday after U.S. President Donald Trump threatened to launch fresh strikes on Iran unless it reopens the Strait of Hormuz.
Trump’s repeated threats to destroy civilian infrastructure, including power plants and bridges, if the vital waterway is not open by Tuesday, have put traders on edge for reciprocal attacks by Iran on targets in the Gulf states.
The S&P 500 e-mini futures fluctuated between gains and losses, down 0.1%, while MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.4%, with liquidity thin as many countries around the region observed the Easter Monday and Tomb Sweeping Day holidays.
The Nikkei 225 rose 0.6%, as South Korea’s Kospi advanced 1.4%.
Investors took some confidence after Axios reported that the U.S., Iran, and a group of regional mediators are discussing the terms for a potential 45-day ceasefire that could lead to a permanent end to the war, citing four U.S., Israeli, and regional sources with knowledge of the talks, according to a Reuters report.
Brent crude futures opened higher before paring gains, rising 1.2% to $110.29 a barrel on the potential supply disruption.
Markets looked through an agreement on Sunday by members of the OPEC+ group to raise their output quotas by 206,000 barrels per day for May, as several major oil producers behind the Strait of Hormuz have sustained damage to oil production facilities and transport infrastructure since the war started.
Many Asian markets were closed for public holidays, but stocks in Tokyo and Seoul rose, while movements on other open exchanges were mixed.
Crude oil prices spiked at the week’s market opening but pared gains in morning trade. US benchmark West Texas Intermediate was flat at $111.61 a barrel, and North Sea Brent crude gained 1.2 per cent to $110.35.
“Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!!” Trump wrote on his Truth Social platform, later telling Fox News there was a “good chance” Iran would agree to a deal.
Tokyo was up 1.6 per cent, and Seoul gained 2.2 per cent. Singapore was also up 0.4 per cent, but Jakarta shed 0.6 per cent.
Chinese markets were closed for the Qingming Festival, while others, including Sydney and Wellington, took a break for Easter Monday.
The war, entering its sixth week since the US and Israel first attacked Iran on February 28, has engulfed the Middle East in conflict and upended the global economy.