A sweeping rally that lifted equities across Asia, Europe, and the United States to fresh records on Wednesday gave way to more cautious trading on Thursday as investors weighed whether a nascent US-Iran peace framework would hold together.
Wednesday’s Surge
Reports that Washington and Tehran were closing in on a memorandum of understanding covering nuclear limits, sanctions relief, and the reopening of the Strait of Hormuz sent oil prices tumbling and risk appetite soaring on Wednesday. Brent crude fell roughly 8%, pulling back toward $102 a barrel, while West Texas Intermediate dropped to around $93.
The S&P 500 climbed 1.5% to close at 7,365, and the Nasdaq Composite rose 2% to finish at 25,838 — both record closing highs for a second consecutive session. The Dow Jones Industrial Average gained 612 points to 49,910, pulling it out of correction territory. In Asia, India’s Sensex surged 940 points, or 1.22%, as falling crude prices offered relief to the import-dependent economy. South Korea’s Kospi jumped 6.5%, extending its 2026 advance to 75%, as Samsung Electronics breached a $1 trillion market capitalization for the first time. Japan’s Nikkei 225 crossed the 62,000 level for the first time, according to Bloomberg.
Thursday’s Retreat
The euphoria faded quickly. Iranian state media signaled that key elements of the US proposal were “unrealistic,” even as President Donald Trump insisted that Iran had agreed it “cannot have a nuclear weapon”. Oil prices remained volatile, with Brent crude slipping further below $100 and WTI trading near $93.
India’s Sensex ended Thursday down 114 points, or 0.15%, at 77,844.52, as profit-taking in IT and consumer stocks offset gains in autos and defense. The FTSE 100 fell 0.57%, weighed down by energy-sector weakness as the plunge in crude prices hit London-listed oil majors. European stocks were mixed, with the Euro Stoxx 50 edging up 0.23%.
Deal or No Deal
The whiplash underscored how heavily markets are now pricing in a resolution to a conflict that has roiled energy supply chains for months. The US last week launched “Project Freedom,” an effort to reopen the Strait of Hormuz, only to pause the operation within a day after mediation by Pakistan and other nations. Analysts warned that the gap between Washington’s optimism and Tehran’s skepticism remained wide.
“The trigger was largely global — renewed optimism around a potential US-Iran peace deal led to a sharp decline in crude oil prices, offering immediate relief to an import-heavy economy like India,” said Hariprasad K, founder of Livelong Wealth. Whether that relief proves lasting depends on a deal that, for now, exists only on paper.
