Global stocks saw a significant rise and oil prices fell Tuesday after U.S. President Donald Trump indicated the Middle East conflict could end soon. However, Iran's military issued defiant statements, creating doubt about a rapid de-escalation.
Europe's STOXX 600 index climbed 1.5%, while Asia-Pacific shares outside Japan increased by approximately 3.2%. Brent oil futures experienced an initial drop of up to 11%, settling around a 5.6% decline.
Trump's remarks injected market optimism, contrasting with internal Iranian developments where hardliners supported Supreme Leader Mojtaba Khamenei and the Revolutionary Guards vowed to continue oil export blockades until U.S. and Israeli attacks cease. Trump warned of stronger U.S. retaliation for any export blockades.
Market analysts noted the significant impact of Trump's pronouncements, stating markets are highly sensitive to his every word, contributing to current volatility driven by headlines.
U.S. Defense Secretary Pete Hegseth indicated Tuesday would feature the most intense strikes in the ongoing campaign against Iran.
Investor sentiment stabilized, leading to a rebound in European and Asian equities. Government bond yields dipped, and interest rate expectations shifted. European indexes, including Germany's DAX and France's CAC 40, posted gains. Money markets adjusted expectations for European Central Bank rate hikes, and benchmark German 10-year bond yields fell.
Rate-sensitive two-year yields also declined sharply. U.S. equity futures turned negative after an earlier rise. The U.S. dollar index saw a slight decrease.
Gold prices increased, and cryptocurrencies like Bitcoin and Ether experienced gains.