Inspirited by the progress in the negotiations of the US-Iran war, the American stock market closed slightly higher on Monday. Following suit, the Asia-Pacific stock markets opened higher on Tuesday, April 7th. Both the S&P 500 Index and the Nasdaq Index continued to rise for the fourth consecutive trading day, setting the longest streak of gains since January of this year.
President Trump reiterated on Monday that Iran must fully open the Strait of Hormuz by 8 p.m. Eastern Time on Tuesday evening. Otherwise, the US would destroy Iran’s internal facilities such as power plants and bridges within four hours after the deadline.
Trump warned that if no agreement is reached, Iran would be “taken out in one night”.
Despite the tough rhetoric, Trump also revealed that both sides are seriously engaged in negotiations. Regarding Iran’s latest proposal, Trump mentioned that Iran’s ceasefire proposal, though “not good enough yet”, represents a significant step forward.
He also mentioned that some affected countries are helping mediate in hopes of ending the conflict that has been ongoing for five weeks.
Reports indicate that Iran has rejected the immediate ceasefire agreement proposed by the US and instead, demands a permanent end to the war. Iran has put forward a 10-point plan that includes “ending regional hostilities”, “establishing a safe passage agreement for the Strait of Hormuz”, “lifting sanctions”, and “post-war reconstruction”.
Due to the impact of this situation, the Strait of Hormuz, which serves as a global energy artery, has begun to slowly resume transport. Eight oil tankers passed through on Monday, but it remains far below the pre-war daily average of 20 million barrels. As of 8:45 p.m. Eastern Time on Monday, West Texas Intermediate (WTI) futures for May delivery rose by 0.93% to $113.46 per barrel. Brent crude for June delivery also increased by about 0.54% to $110.36 per barrel.
On Monday, the US stock market demonstrated resilience, with all three major indices closing in the green. The S&P 500 Index and the Nasdaq Index both recorded the longest four-day upward trend since January.
According to closing data, the Dow Jones Industrial Average rose by 0.36% to 46,669.88 points. The S&P 500 Index increased by 0.45% to 6,612.02 points, while the Nasdaq Index rose by 0.54% to 21,996.34 points.
Among the 11 major sectors in the S&P 500, the communication services sector showed the strongest performance, while stocks in the travel, leisure, aerospace defense, and home construction sectors outperformed the market. Utilities performed the weakest, leading the main decline for the day.
In terms of individual stocks, Soleno Therapeutics surged by 32.3% due to acquisition news. Both Coinbase and MicroStrategy, related to cryptocurrency, rose by 1.9% and 6.6% respectively, driven by the increase in Bitcoin prices.
However, due to geopolitical uncertainties, market trading volume shrank, falling below the average level of the past 20 trading days.
The Asia-Pacific markets showed strong performance during early trading on Tuesday. The Australian S&P/ASX 200 index soared by 1.4%, the Nikkei 225 index rose by 0.55%, and the South Korean KOSPI index and Taiwan Weighted Index both briefly hit 2% gains.
Chief Market Strategist at Carson Group, Ryan Detrick, commented on the current market sentiment, stating, “The reality is that we are moving step by step, hopefully towards some sort of solution.”
He further added that despite the intense short-term volatility, as earnings season approaches, the market remains optimistic about corporate performance, which helps support the current bull market trend.