Global stocks trade cautiously while investors weigh peace hopes, AI-fueled tech rally, and uncertainty over the Strait of Hormuz…..
Oil prices extended their decline on Thursday as investors responded to growing expectations that diplomatic efforts could bring an end to the ongoing Middle East conflict and restore normal activity through the Strait of Hormuz, one of the world’s most critical energy corridors.
After suffering a dramatic sell-off a day earlier, crude prices dropped again, with Brent crude slipping below the psychologically important $100-per-barrel mark. The international benchmark fell 2.6 per cent to $98.61 a barrel, while US benchmark West Texas Intermediate shed 2.9 per cent to trade at $92.36.
The latest slide follows reports that Washington is pushing a proposal aimed at ending months of hostilities involving Iran and Israel. US President Donald Trump hinted that negotiations were making progress after what he described as positive talks, while Tehran reportedly signaled it was reviewing the peace framework before responding through mediator Pakistan.
The conflict, which began in late February after coordinated military strikes by the United States and Israel, has rattled financial markets for months. Iran’s retaliatory actions across the region, including disruptions around the Strait of Hormuz, raised fears over global energy supplies and triggered repeated spikes in oil prices.
But as hopes for de-escalation gained momentum, traders rapidly pulled money out of safe-haven assets and high-risk oil positions.
Despite the optimism, analysts warned that investors may have reacted too quickly.
Susannah Streeter, chief investment strategist at Wealth Club, said the intense market excitement seen earlier this week was beginning to cool as traders realized that a permanent resolution may still face major obstacles.
“There’s growing recognition that several difficult negotiations still lie ahead before any long-term settlement can truly be secured,” she noted, adding that uncertainty around Iran’s next move continues to keep investors on edge.
Global stock markets reflected that cautious mood.
On Wall Street, trading was mixed as investors balanced geopolitical developments with continued enthusiasm surrounding artificial intelligence and strong technology earnings.
The Dow Jones Industrial Average slipped 0.2 per cent, while the S&P 500 edged 0.1 per cent higher. The Nasdaq Composite outperformed once again, climbing 0.5 per cent as investors poured more money into major tech firms riding the AI boom.
The rally in technology stocks has been strengthened by robust quarterly earnings from industry giants including Apple, Microsoft, Alphabet, and Samsung, reinforcing investor belief that artificial intelligence will remain one of the market’s biggest growth drivers this year.
Trade Nation analyst David Morrison said the pace of buying in US equities was becoming increasingly aggressive, describing the current atmosphere as a “melt-up” phase where investors rush into stocks out of fear of missing further gains.
According to him, market momentum remains so strong that many traders are struggling to identify what could trigger a meaningful correction — a situation he suggested may itself become a source of concern.
European markets, however, closed lower after strong gains in the previous session. London’s FTSE 100 fell 1.6 per cent, Frankfurt’s DAX dropped 1.0 per cent, and Paris’ CAC 40 declined 1.2 per cent as investors locked in profits.
In Asia, sentiment remained more upbeat. Tokyo’s Nikkei 225 surged 5.6 per cent after Japanese markets reopened following public holidays earlier in the week. Hong Kong’s Hang Seng Index gained 1.6 per cent, while Shanghai’s Composite Index rose 0.5 per cent.
Currency markets also reflected easing geopolitical anxiety. The US dollar weakened slightly against major currencies as demand for traditional safe-haven assets softened.
Meanwhile, Norway’s central bank raised its benchmark interest rate by a quarter point to 4.25 per cent, warning that prolonged instability in the Middle East could still fuel inflationary pressures globally.
Beyond the financial markets, major corporations continue to count the cost of the regional conflict. Emirates Group on Thursday reported a three per cent increase in annual profits to $5.7 billion, despite widespread flight disruptions linked to the war.
For now, investors remain caught between two powerful forces: optimism that diplomacy could stabilize global markets, and lingering fears that the crisis could escalate again without warning.
That uncertainty is likely to keep oil prices, currencies, and global equities on edge in the days ahead.
