Trump said on Monday that he had put a proposed military strike against Iran on hold to allow space for negotiations aimed at ending the ongoing conflict, after Tehran reportedly sent a fresh peace proposal to Washington.
He later stated that there was a “very good chance” of the United States reaching an agreement with Iran to stop Tehran from developing nuclear weapons.
Despite this, investor sentiment remained fragile after markets were shaken during the previous session by a drone attack in the United Arab Emirates over the weekend.
“We’ve seen a lot of back and forth already,” IG market analyst Fabien Yip told Reuters.
“Until we actually see real action happening in the Strait of Hormuz, where ships are moving safely again and traffic through the route shows a meaningful recovery, markets are likely to remain unconvinced by statements coming from either side,” he added.
Following Trump’s comments, Brent crude dropped over 2% to $109.41 a barrel, while US crude slipped 1.3% to $107.25 per barrel. However, both benchmarks were still trading more than 50% above levels seen before the war began.
In equity markets, MSCI’s broad Asia-Pacific index excluding Japan declined 0.22%. Japan’s Nikkei gained 1%, while South Korea’s Kospi fell 2%.
Nasdaq futures erased early advances and traded 0.07% lower, while S&P 500 futures slipped 0.03%. In Europe, EUROSTOXX 50 futures rose 0.4%, while FTSE and DAX futures edged up 0.3% and 0.4%, respectively.
Investor focus is also shifting towards the artificial intelligence sector, with Nvidia set to announce earnings on Wednesday. Expectations remain extremely high for the world’s most valuable company.
“Nvidia’s earnings will serve as a major test for markets that are already trading near record levels and have staged an extraordinary rebound since the March lows,” said Richard Reyle, chief investment officer at Questar Capital Partners.
He added that Nvidia has effectively become the face of the AI-driven rally, which has played a central role in pushing markets higher over the past few years.
