Crude oil edged higher and equities consolidated on Thursday as conflicting headlines kept investors cautious on the outlook for the US-Iran ceasefire talks.
Brent rose 1.1% to over $103 a barrel, rebounding from a 2% drop in the previous session, when reports about the negotiations eased concerns. Since then, the US has insisted that talks are ongoing, even as Iran rejected the outreach by President Donald Trump. Oil has stayed volatile this week with losses followed by gains the very next day.
Asian stocksposted a modest 0.2% drop, consolidating after two consecutive days of advances. US equity-index futures fluctuated between small gains and losses as traders awaited the outcome of talks before taking fresh positions amid the uncertainty. A Bloomberg gauge of the dollar wavered and gold edged up 0.6%.
“Markets have been extremely headline driven as we keep getting different, conflicting messages on the Iran situation,” said Fabien Yip, a market analyst at IG International. “Markets needs more certainty on what the outcome would be. Until there is agreement on the truce terms, unfortunately we will still see these swings.”
The moves signaled caution among traders as US efforts to end the conflict gained momentum, overshadowing reports that Iran rejected a truce and continued strikes. Despite mixed signals on negotiations, Washington has ordered thousands of troops to the region, raising concerns Trump may be gearing up for the kind of risky ground invasion he once opposed.
Trump has been pushing for talks with Iran in a bid to halt a conflict that’s approaching the four-week mark. The White House said the US has been in productive talks with Iran in the last three days and has compiled a plan stipulating the Islamic Republic dismantle its main nuclear facilities and use a reduced missile arsenal in self-defense only.
But Tehran is signaling little willingness to compromise. A move by the US to start indirect talks is illogical and not viable at this stage, semi-official Fars news agency reported.
Even so, attention stayed fixed on the Strait of Hormuz — a vital artery for Middle East oil flows — that remains effectively closed for ships.
“Markets are positioning for a conflict resolution, despite lingering strategic ambiguity,” said Elias Haddad at Brown Brothers Harriman & Co. “Ultimately, Iran’s response to the US de-escalation pivot will decide whether peak fear is behind us or still ahead.”
Iran has its own conditions for a ceasefire, state-owned Press TV added, citing an unnamed senior security official. The nation wants guarantees the US and Israel won’t resume their attacks as well as reparations for damages and recognition of its authority over the Strait of Hormuz.
In other corners of the market, Treasuries edged lower on Thursday after drifting higher across the curve during the US session, with the US 10-year yield three basis points lower to 4.33%.
Shares in South Korea fell 1.5%. Asian memory and storage stocks may track declines in US peers on concerns over weaker demand after Google researchers highlighted a new compression technique for large language models.
Concerns over the conflict have rippled across Asia. South Korea has set up an emergency task force to prepare for adverse scenarios, Japan is reviewing its supply chain for petroleum-related products and the Philippines has declared a national emergency.
“There’s really no way to know at this point what the facts are regarding the state of negotiations, so expect more whipsaw action as things continue to progress,” said Bespoke Investment Group strategists. “While Iran still holds some cards, the chips are stacked heavily against them.”
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