U.S. markets stabilized after a volatile start to the week as investors reacted to signals that the conflict with Iran could be nearing its end. President Donald Trump said military objectives were largely achieved and suggested hostilities may conclude sooner than initially expected, a shift that helped lift equities and ease energy prices after an early surge. The S&P 500 recovered from earlier losses, while oil retreated from recent highs as traders reassessed geopolitical risk and the potential for supply disruptions around the Strait of Hormuz. Policy developments also remained in focus; the G7 signaled readiness to release strategic petroleum reserves if needed to stabilize global markets, while a survey from the New York Fed showed U.S. consumers maintaining relatively stable inflation expectations even as labor-market confidence softened. In the corporate sphere, tensions between government and the tech sector surfaced after Anthropic filed a lawsuit against the U.S. Department of Defense over being labeled a supply-chain risk, while reports indicated that AI setbacks are forcing Apple (NASDAQ:AAPL) to delay the release of a long-anticipated smart home device.
European markets remained cautious as the Middle East conflict continued to ripple through energy markets and inflation expectations. Surging oil prices earlier in the week pushed traders to reconsider the outlook for monetary policy, with markets briefly increasing bets that the ECB could tighten policy further this year in response to energy-driven inflation risks. However, some strategists argued that markets may be overestimating the need for additional hikes if global growth slows and the Federal Reserve System eventually moves toward easing. Meanwhile, diplomatic developments also drew attention as President Donald Trump held his first phone call of the year with Vladimir Putin to discuss the conflict with Iran, while European officials were informed that U.S. sanctions waivers related to Russia remain narrowly limited and temporary. Across the region, equity markets struggled for direction and government bond yields fluctuated as investors balanced geopolitical risk, the path of energy prices, and the evolving outlook for central-bank policy.
Asian markets tracked global sentiment as traders monitored both geopolitics and key economic signals from China. Investors awaited the release of January-February trade figures expected to show resilient external demand, with exports and imports projected to post solid YoY growth as Chinese companies expand sales beyond the U.S. market. At the corporate level, battery giant CATL reported annual profit that exceeded expectations with robust overseas demand and expansion in energy-storage products, reinforcing optimism about the global EV supply chain. On the other hand, elevated oil prices linked to the Middle East conflict are beginning to ripple through manufacturing costs, with Chinese apparel producers preparing for higher input prices tied to petrochemical materials. Authorities in Beijing have also instructed major state energy firms to maintain steady refined-fuel supply to ensure domestic market stability amid the volatile energy backdrop. In the Asia-Pacific region, the economic effects of the Middle East crisis are increasingly visible, particularly in the energy and transportation sectors. In Australia, a surge in consumer demand for fuel prompted supply-chain pressure even as officials assured the public that inventories remain sufficient. Airlines across the region are also adjusting plans as jet-fuel costs swing sharply, with Air New Zealand suspending its earnings outlook while reassessing assumptions made before the spike in fuel prices. Meanwhile, market surveys suggest regional investors see heightened vulnerability in export-driven markets such as South Korea if geopolitical tensions persist. Over the region the volatile energy prices continues to influence investment flows and corporate plannings.