Asia-Pacific stock markets rose broadly on Thursday, with Japan's Nikkei 225 gaining 2.1%, South Korea's KOSPI advancing 1.8%, and Australia's ASX 200 climbing 1.4%, as investors around the globe took cues from a powerful Wall Street rally that pushed the S&P 500 to a new all-time high of 5,847 overnight. The catalyst was a series of diplomatic signals — including a statement from the U.S. State Department and comments from senior Iranian officials relayed through Omani intermediaries — that both parties had expressed willingness to explore a structured ceasefire.
The optimism triggered a sharp rotation out of the defensive and safe-haven positions that institutional investors had built over the previous six weeks: energy stocks fell as oil prices retreated from recent highs, gold slipped 1.2%, and government bond yields rose as investors reduced duration. Risk assets — technology stocks, emerging market equities, and high-yield credit — surged in response.
Technology Stocks Lead the Charge
Technology stocks dominated the Asian rally, with Taiwan's TAIEX gaining 2.8% led by a 4.5% surge in TSMC following the company's blockbuster Q1 earnings report released earlier this week. South Korea's Samsung Electronics and SK Hynix gained 2.3% and 3.1% respectively as investors grew more confident that the semiconductor supply chain disruptions feared at the outset of the conflict will not materialize.
Hong Kong's Hang Seng Index gained 2.1%, with Alibaba, Tencent, and Meituan each posting gains exceeding 2.5%. The rally was amplified by China's better-than-expected Q1 GDP data released earlier this week and by continued progress in U.S.-China trade talks, with the two sides reportedly close to a framework agreement on technology export controls that would lift some restrictions on semiconductor equipment.
Caution Remains Warranted
Despite the euphoric tone in markets, experienced investors warned against extrapolating ceasefire optimism into certainty. The Iran-U.S. conflict has already defied three previous rounds of diplomatic optimism that briefly lifted markets before fading. The Omani channel, while historically reliable, has so far produced only exploratory contacts rather than substantive negotiations.
JPMorgan's Asia equity strategy team issued a note Thursday recommending investors use the rally to rebalance toward quality over near-term momentum plays, arguing that even a genuine ceasefire will take months to translate into the oil price decline and global growth recovery that justifies current equity valuations. The team maintained its year-end S&P 500 target of 5,600 — below current prices — suggesting they view some of the recent rally as speculative excess.