Trump Delay Boosts Asian Stocks, Oil Rebounds

Trump's U-turn, announced hours before a 48-hour ultimatum deadline, initially spurred optimism, with Wall Street indexes climbing over one percent. However, Iranian media, including Fars news agency, quickly denied any talks between Tehran and Washington, with Deputy Speaker of Parliament Ali Nikzad stating no negotiations would occur and the Strait of Hormuz would remain closed.

This denial fueled investor skepticism, causing oil prices to rebound significantly, with Brent climbing 1.9 percent to $101.90 per barrel and West Texas Intermediate (WTI) up 2.9 percent to $90.00 per barrel. Pepperstone's Michael Brown identified Trump's de-escalation attempt as the most crucial development.

Despite this, Stephen Innes at SPI Asset Management warned that while headlines create short-term market movements, fundamental issues like disrupted shipping lanes and fractured refining capacity persist, ensuring the medium-term oil barrel remains constrained. The ongoing closure of the Strait of Hormuz continues to impact airlines, with Vietnam's national air carrier suspending nearly two dozen domestic flights and Cathay Pacific extending flight suspensions to Dubai and Riyadh until May 31.

The Wall Street Journal reported Saudi Arabia and the United Arab Emirates are considering joining the conflict, adding to regional instability.