Asian Pacific equities slide

US stock index futures were sharply lower in early trade on Monday. This followed a weekend of bellicose statements from both the US and Iran. Geopolitical tensions ramped up further following the Trump administration’s ultimatum to Tehran demanding the reopening of the Strait of Hormuz, a key shipping route for global oil and energy products.

A failure to do so would result in US forces turning their firepower on Iran’s energy infrastructure. Tehran responded by threatening immediate retaliation against energy infrastructure and desalination facilities across the Gulf region should the US follow through on its threat.

But in one of the most extraordinary market turnarounds in recent history, US stock index futures turned on a sixpence and roared higher. At around 10:45 GMT, the S&P 500 had been trading near the low of the day, below 6,440, and at its worst level since early September.

Just twenty minutes later, it was within sight of 6,700, jumping close to 4%. The surge came after President Trump declared that: ‘... the US and Iran have had, over the last two days, very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East.’

Crude oil prices cratered, while gold and silver, which had both sold off dramatically overnight, roared back to life, tacking on 9% and 14% respectively from their session lows.

It’s difficult to know how seriously to take this latest interjection from President Trump. It certainly doesn’t make trading any easier, although that’s a side issue when so many lives are at stake. But that’s a risk with wars, particularly when the leadership on both sides appears chaotic.

At first glance, this looks as if the Trump administration is off the hook. As many analysts pointed out, the lack of any clear, achievable war aims meant that President Trump could walk away, claiming victory, at any point. That appears to be what he is doing now. Unfortunately, the latest spin from Tehran on this is that: ‘Trump backs down from attacking Iran’s energy infrastructures after Iran’s sharp warning.’ He’s not going to like that.

Technically, US stock indices were due for a bounce, and now they’ve had one. Could that be it? Certainly. Yet the move back over support around 6,500 is very helpful from a bullish perspective, and the S&P 500’s daily MACD was looking a little oversold. But traders will also be mindful that this could be a false dawn.

Source: TN Trader

There’s been a fair amount of technical damage chart-wise, although that’s nothing that can’t be fixed by a few positive sessions. But the issues which weighed on equities before the outbreak of this war are still there. And more so. Two months ago, investors were looking forward to additional rate cuts this year. That is no longer the case, although today’s selloff in energy prices will be helpful.

Nevertheless, concerns over AI overspend and worries about private credit and bad loans have come back to haunt the financial sector. It would be so much easier if we only had to deal with one issue at a time.

European stock indices moved in line with US futures. They fell sharply at the start of the new trading week as escalating tensions surrounding the Iran conflict and the blockage of the Strait of Hormuz weighed heavily on regional sentiment.

But they exploded higher after President Trump delayed US military operations for five days, citing constructive talks with Tehran over the weekend. Who knew? As the youngsters are wont to say.

Source: TN Trader

The US dollar strengthened overnight as heightened geopolitical tensions increased demand for safe-haven assets and rising oil prices reinforced expectations that inflation pressures could persist. The cash Dollar Index retested resistance at 100.00 during early European hours.

This came after reports suggested the US may be considering a possible ground operation targeting Iran’s Kharg Island oil export hub. Iran’s Islamic Revolutionary Guard Corps warned it would shut the Strait of Hormuz completely if the United States took further action, adding to uncertainty across currency markets.

Higher oil prices are also supporting expectations that the Federal Reserve could maintain a hawkish stance for longer. At its March meeting, the Fed voted 11–1 to keep interest rates unchanged within the 3.50%–3.75% range, marking a second consecutive hold following cuts in late 2025.

Futures markets currently indicate an 85.5% probability that rates will remain unchanged at the April meeting, reflecting expectations that policymakers will continue monitoring inflation risks linked to the conflict.

In fact, the possibility of a rate hike in 2026 is starting to get priced in. But the US dollar subsequently plunged after President Trump announced that he was halting US military operations against Iranian energy infrastructure for five days.

This came after he claimed that weekend talks with Iran had proved constructive. But there’s been plenty of push-back from Tehran over Mr Trump’s claims, so let’s just say the situation remains fluid.

Source: TN Trader

Front-month WTI lost 14% in under 10 minutes following President Trump’s announcement that he was calling off US attacks on Iran’s energy infrastructure. But it rallied back 10% off the morning’s low, just above $84 per barrel.

Source: TN Trader

This suggests that traders aren’t wholly convinced that any declarations of progress in negotiations between the US and Tehran should be taken seriously. It’s all made for an exciting morning. But market participants should take care until there’s further clarity over what has been agreed, and by whom.

Bitcoin moved lower overnight, continuing a pullback which began last Tuesday after it came within a cent of $76,000, its best level since early February. But it began to make back its overnight losses, having tested support around $68,000, while there’s a band of resistance which comes in between $72,000 and $76,000.

Both Bitcoin and Ether have proved to be remarkably resilient given the sharp falls across global equities and precious metals. This gives weight to the bullish thesis, which views last week’s pullback as a healthy correction after recent gains. But the bearish argument that current optimism is misplaced, and that crypto's recent gains will soon evaporate, is also perfectly valid.

In both cases, we should expect crypto volatility until a clear bullish or bearish trend emerges. Ether followed Bitcoin’s move, pushing higher after initial weakness. It managed to hold above $2,000 in early trade on Monday, which is an initial level of support. But this stretches down to $1,800, and if Ether can hold this, then it would increase the possibility of a rebound.