Global markets traded cautiously higher as investors weighed escalating geopolitical tensions in the Middle East against renewed diplomatic efforts aimed at securing a potential ceasefire between the U.S. and Iran.
U.S. equity futures edged higher, with S&P 500 futures rising around 0.3% in subdued trading conditions following the Easter holiday, while the U.S. dollar softened and 10-year Treasury yields held steady near 4.34%. In commodities, oil prices pulled back slightly from recent highs, with Brent crude hovering near $108 per barrel, as markets reacted to signs that supply routes may remain partially operational.
Sentiment improved modestly after reports indicated that several vessels successfully transited the Strait of Hormuz, including LNG shipments from Qatar, easing immediate concerns over a complete disruption in global energy flows. This development provided some relief to markets that have been highly sensitive to inflation risks stemming from elevated energy prices.
Meanwhile, equities in Asia posted gains, with the MSCI Asia Pacific Index rising 0.4%, led by strength in technology stocks. The move reflected cautious optimism that ongoing negotiations could lead to at least a temporary de-escalation in the six-week-long conflict.
Diplomatic efforts intensified, with U.S. allies and regional mediators—including Pakistan, Egypt, and Turkey—reportedly pushing for a 45-day ceasefire framework. However, sources suggest the likelihood of a near-term agreement remains low, as Iranian officials reiterated their refusal to accept external pressure or reopen the Strait of Hormuz in exchange for a temporary truce.
On the geopolitical front, tensions remain elevated. Israeli forces continue targeting Iranian infrastructure, while Iran signaled it is preparing a formal diplomatic response to U.S. proposals. In parallel, reports of attacks on key energy and petrochemical facilities in southern Iran, including the South Pars complex, have heightened concerns over supply disruptions.
Adding to uncertainty, U.S. President Donald Trump issued renewed warnings, threatening to escalate strikes on Iranian infrastructure if a deal is not reached, setting a reported deadline for diplomatic progress. Despite these developments, negotiations between U.S. and Iranian officials are ongoing through indirect channels.
In precious metals, gold prices declined around 0.6%, extending recent losses as persistent inflation concerns and reduced expectations for near-term rate cuts weighed on the non-yielding asset.
Overall, markets remain caught between geopolitical risk and fragile diplomatic optimism. While signs of continued energy flows and ongoing negotiations are supporting risk sentiment in the short term, the situation remains highly fluid, with headline risk likely to drive volatility in the sessions ahead.
