Stocks Bounce and Oil Retreats on Mideast Ceasefire Reports

Stocks Rally, Oil Retreats as Mideast Ceasefire Reports Spur Market Caution

Market Reactions to Ceasefire Developments

By Tom Westbrook

Global Market Movements

SINGAPORE, March 25 (Reuters) - Stocks rose and oil fell on Wednesday on reports the U.S. is seeking a month-long ceasefire in its war on Iran, and had sent a 15-point plan to Iran for discussion, raising hopes for a resumption of oil exports out of the Persian Gulf.

S&P 500 futures rose 0.9% in the Asia morning, European futures lifted 1.2% and Brent crude futures fell about 6% to $98.30 a barrel.

Equity markets in Australia, South Korea and Japan rose roughly 2% in morning trade and gold, which investors had been selling to take profit after a long rally, rose 1.6%.

Market Sentiment and Uncertainties

"The market is trading the headlines at the moment," said Kerry Craig, global market strategist at J.P. Morgan Asset Management in Melbourne.

"So there's a positive tone. The difficulty is now...there are still unknowns about where this actually goes from here and whether there's anything material in terms of a ceasefire."

Diplomatic Efforts and Ceasefire Talks

U.S. President Donald Trump said on Tuesday the U.S. was making progress in negotiating an end to the war, including winning an important concession from Tehran, while a source confirmed that Washington had sent Iran a 15-point settlement proposal.

Israel's Channel 12, quoting three sources, said the U.S. was seeking a month-long ceasefire to discuss the 15-point plan.

Tehran has denied that direct talks have taken place.

Cautious Optimism in the Markets

CAUTIOUS OPTIMISM

Markets have responded well, though cautiously, to rumblings since Monday that the U.S. is looking for an end to hostilities, since it is not really clear if there is much progress on when the Strait of Hormuz can open to oil tankers.

Currency and Commodity Impacts

So far this week the dollar is marginally lower - and it was under slight pressure on Wednesday morning - buying 158.8 yen and trading at $1.1620 per euro. [FRX/]

Brent crude prices remain up 35% since the war began and near the $100 a barrel level that's already causing economic pain for buyers in Asia who are paying up for jet fuel and diesel. [O/R]

Central Bank Responses and Bond Yields

Interest rate markets have also stuck with expectations of fairly extreme responses from central bankers, pricing a series of hikes in Europe, Britain, Japan and Australia in the coming months to tame inflation, and no further U.S. rate cuts.

Benchmark 10-year Treasury yields dropped around five basis points to 4.34% in Tokyo trade and two-year yields fell by a similar margin to 3.875%.

Yields fall when bond prices rise.

Investor Positioning and Ongoing Risks

Light Positioning and Market Fragility

LIGHT POSITIONING

"For now, it feels like a market that is reacting rather than anticipating, and until there is clearer alignment from both sides, I would expect price action to remain fragile," said Marc Velan, head of investments at Lucerne Asset Management in Singapore.

"People are reluctant to chase moves that are entirely headline-driven and can reverse quickly."

Geopolitical and Economic Developments

On the ground U.S., Israeli and Iranian strikes have continued and sources said Washington was preparing to send more troops to the region.

Two people familiar with the matter told Reuters on Tuesday that the U.S. was expected to send thousands of soldiers from the Army's elite 82nd Airborne Division to the Middle East.

The Australian dollar hung around 70 U.S. cents after February inflation data - from before the outbreak of war - was a tad cooler than expected.

Credit Market Concerns

War worries have also obscured growing concerns in credit markets where there are signs of stress in private credit and Ares Management on Tuesday became the latest asset manager to cap withdrawals at a private debt fund, spooking investors.

Shares of Ares, which managed roughly $623 billion in assets at the end of 2025, fell 1% on Tuesday. They are down 36% so far this year.

(Reporting by Tom Westbrook; Editing by Sam Holmes)