Signs of de-escalation in the Middle East have emerged, leading to a rebound in risk assets and pushing Asian stock markets higher in line with US equities, although market divergence persists.
On Tuesday, Asia-Pacific markets opened broadly higher, with the MSCI Asia Pacific Index rising by 1.5%. Stock markets in Japan, South Korea, and Australia all recorded gains.
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According to CCTV News, US President Trump stated on the 23rd that he had ordered a halt to all military strikes against Iranian power plants and energy infrastructure for five days, contingent on the success of ongoing meetings and discussions. However, CCTV reported, Iran's Islamic Parliament Speaker Mohammad Bagher Ghalibaf posted on social media denying any dialogue with the United States.
Wallstreetcn mentioned that for Wall Street, the truthfulness of Trump's statement may not matter. The significant market rebound is not because investors blindly believed the President's &#34;ceasefire&#34; rhetoric, but rather they see it as an assurance: The President's extreme aversion to poor market data will ultimately prevent him from taking more extreme military action.
Trump's conciliatory remarks reversed the market's pessimistic sentiment, with US stock indices closing up over 1% overnight. On Tuesday, Asia-Pacific stock markets followed Wall Street's rally, with the MSCI Asia Pacific Index opening 1.5% higher and the Korea Composite Stock Price Index opening up over 4%.
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European Stock 50 futures rose 1.2%, the Australian S&amp;P/ASX 200 Index gained 0.9%, and the Nikkei 225 Index opened higher and continued to climb, expanding its gains to 2.2%.
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Rajeev de Mello, Portfolio Manager for Global Macro at Gama Asset Management, said:
<blockquote>
The US statement provides temporary support for market risk aversion. The sharp decline in energy prices is positive for global risk assets. The slight panic investors felt early Monday morning has quickly reversed.
</blockquote>
Brent crude rebounded approximately 1% at the open on Tuesday, trading around $101 per barrel. WTI crude futures extended their gains for the day to 2.2%. Yesterday, crude oil prices had plunged over 14%.
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The transit situation through the Strait of Hormuz remains critical, with very few vessels passing through this key waterway. Brock Weimer of Edward Jones noted:
<blockquote>
While the shift in rhetoric is an encouraging development, we believe the clearest indicator of a meaningful de-escalation will be whether oil can resume flowing through the Strait of Hormuz.
</blockquote>
In other assets, industrial metal silver extended its overnight gains in early trading on Tuesday, approaching $70, before pulling back slightly.
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Spot gold fell over 1% to $4347 per ounce.
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Nikkei 225 Index opened higher and continued to rise, expanding its gains to 2.2%. The MSCI Asia Pacific Index rose 1%. Brent crude rebounded about 1% at the open on Tuesday, trading around $101 a barrel. WTI crude futures extended their gains for the day to 2.2%. Yesterday, crude oil had plunged more than 14%

- The Middle East situation shows signs of easing, with risk assets rebounding as Asian markets follow U.S. gains, though market divergence persists.  
- U.S. President Trump indicated a temporary pause in military action against Iran's energy infrastructure for five days, contingent upon ongoing discussions, while Iranian officials denied dialogue.  
- As a result, the MSCI Asia-Pacific index rose by 1.5%, with major indexes in Japan, South Korea, and Australia seeing significant increases, reflecting improved investor sentiment.

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Trump TACO! Asia-Pacific Stocks Surge, Korea Composite Index Up Over 4%, Oil Rebounds After Plunge