Oil prices resumed their climb, the most visible barometer of investor anxiety.
In the wake of historic losses, Asian markets found their footing on Thursday, led by South Korea's Kospi clawing back a stunning 10.1% — a mirror image of the panic that had gripped it just hours before. Wall Street's Wednesday rebound, buoyed by solid economic data and a brief pause in oil's ascent, offered the world a moment of cautious relief. Yet the respite was incomplete: oil prices resumed their climb with the dawn, reminding investors that the deeper story — a war with Iran, inflation's creeping return, and the Federal Reserve caught between competing mandates — had not changed overnight.
- South Korea's Kospi staged one of its most dramatic single-day recoveries in history, surging 10.1% after suffering its worst-ever single-day collapse, with the government rushing to announce emergency economic measures.
- Oil prices refused to stay quiet, with Brent crude jumping 2.6% and U.S. crude surging 3.2% Thursday morning, reigniting the very anxiety markets had briefly exhaled.
- Wall Street's Wednesday rebound rested on two encouraging pillars — the fastest acceleration in U.S. services growth since 2022 and stronger private-sector hiring — but both data points arrived before higher oil prices could fully distort the picture.
- Big Tech and crypto-linked stocks led the U.S. rally, with Coinbase surging 14.6% and Amazon climbing 3.9%, masking a more fragile and uneven recovery beneath the headline gains.
- Analysts and investors remain divided: some counsel patience, citing history's tendency to absorb Middle East conflicts quickly, while others warn the Iran situation is deteriorating in ways markets have not yet fully priced.
Thursday morning brought a dramatic reversal across Asian markets, with South Korea's Kospi surging 10.1% to close at 5,607.71 — recovering nearly all of the historic ground lost in the previous session's record single-day collapse. The South Korean government moved swiftly to announce emergency economic measures, underscoring how seriously officials viewed the broader fallout. Still, the recovery carried an asterisk: U.S. futures slipped modestly, suggesting the momentum might not hold.
Elsewhere in the region, Tokyo's Nikkei 225 climbed 2.8%, Taiwan's main index gained 2.2%, and Australia and New Zealand posted smaller advances. The pattern reflected Asia's response to what had unfolded on Wall Street the day before, when U.S. stocks rebounded on the back of encouraging economic data and a temporary pause in oil's rise.
That pause proved short-lived. By Thursday morning, oil prices had resumed their climb — Brent crude jumping 2.6% to $83.51 and U.S. crude surging 3.2% to $77.01 — reasserting themselves as the primary barometer of investor anxiety over the war with Iran. Traders had spent the week watching petroleum futures the way sailors watch the sky.
Wednesday's Wall Street rebound had been built on two solid foundations: a report showing U.S. services and business activity growing at its fastest pace since summer 2022, and stronger private-sector hiring ahead of Friday's jobs report. The S&P 500 rose 0.8%, the Dow added 0.5%, and the Nasdaq climbed 1.3%. Cryptocurrency stocks surged alongside Big Tech, with Coinbase jumping 14.6% and Amazon rising 3.9%. But both economic reports carried an implicit caveat — they predated the full inflationary impact of higher oil prices.
The Federal Reserve found itself in a familiar but uncomfortable bind: inflation already elevated, oil pushing it higher, and a job market it was still trying to protect. Some professional investors urged patience, noting that markets have historically recovered from Middle East conflicts when oil doesn't spike too severely. Others were less sanguine. Francis Lun of Venturesmart Asia called the situation "very grim," arguing that a serious miscalculation had been made.
Currency markets moved modestly, with the dollar slipping slightly against the yen and the euro edging lower against the dollar — small signals of a broader uncertainty that, despite the week's dramatic swings, remained very much unresolved.
The morning trading session across Asia opened with sharp gains on Thursday, a sharp reversal from the previous day's turmoil. South Korea's Kospi index surged 10.1% to close at 5,607.71, clawing back nearly all of the historic losses it had suffered just hours earlier—the worst single-day drop in the index's history. The government moved quickly to announce emergency economic measures, signaling concern about the broader fallout. Yet the recovery was fragile. U.S. futures contracts suggested the momentum might not hold: the Dow Jones contract slipped 0.3%, while the S&P 500 futures edged down 0.1%.
Tokyo's Nikkei 225 climbed 2.8% to 55,793.74, though it gave back some of its early strength. Australia's S&P/ASX 200 inched up just 0.1% to 8,913.10, while New Zealand's benchmark rose 0.5%. Taiwan's main index gained 2.2%. The pattern was clear: Asia was responding to what had happened on Wall Street the day before, when U.S. stocks rebounded sharply after oil prices stopped their spike and economic data arrived with encouraging news.
But the underlying tension remained unresolved. Oil prices resumed their climb early Thursday morning, the most visible barometer of investor anxiety about the war with Iran. Brent crude, the international benchmark, jumped 2.6% to $83.51 per barrel. U.S. crude surged 3.2% to $77.01. This mattered because oil prices had become the primary signal driving market sentiment all week—uncertainty about the Middle East conflict had rattled financial markets, and traders were watching petroleum futures the way sailors watch the sky.
Wednesday's rebound on Wall Street had been built on two pillars. First, the economic data: a report showed that growth in U.S. business activity across real estate, finance, and services had accelerated last month at the fastest pace since summer 2022. Crucially, prices in those sectors were rising at a slower rate—at least before the war began to push oil higher. A second report suggested employers outside government had picked up hiring, a hopeful signal ahead of Friday's comprehensive government jobs report. These weren't blockbuster numbers, but they were solid enough to ease some of the anxiety that had gripped markets.
The S&P 500 had risen 0.8% on Wednesday to 6,869.50, erasing much of the damage since the conflict began. The Dow Industrials added 0.5% to 48,739.41, and the Nasdaq composite climbed 1.3% to 22,807.48. The gains were broad-based. Cryptocurrency-linked stocks surged as bitcoin rebounded above $73,000—Coinbase Global jumped 14.6%, and Robinhood Markets rallied 8.1%. Retailers and travel companies strengthened on hopes that a healthy economy and moderating gasoline prices would leave consumers with more spending power. But the real engine was Big Tech: Amazon rose 3.9%, and Nvidia added 1.7%, and because these are among the largest companies by market value, their movements carried outsized weight on the broader index.
Yet optimism had limits. Investors were wrestling with three overlapping concerns: how long the war might last, how high inflation could climb if oil prices stayed elevated, and what damage expensive oil might do to corporate profits. Francis Lun, CEO of Venturesmart Asia, offered a darker read. He believed the Iran situation was deteriorating and that U.S. President Donald Trump had made a serious miscalculation. "The situation is very grim," he said.
Historically, financial markets have shaken off military conflicts in the Middle East relatively quickly—but only if oil prices don't spike too high. That observation had some professional investors counseling patience through the volatility, at least for now. The Federal Reserve, meanwhile, faced a tightening squeeze. Its mandate is to keep the job market healthy and inflation low, but the jump in oil prices was pushing upward on inflation that was already elevated. The economic data from Wednesday was welcome news, but it came with an asterisk: it arrived before the full impact of higher oil prices rippled through the economy.
As Thursday's trading unfolded, the dollar slipped to 156.77 Japanese yen from 156.79, and the euro fell to $1.1626 from $1.1632. The moves were modest, but they reflected the broader uncertainty. Markets were catching their breath after a violent week, but the underlying tensions—geopolitical, inflationary, structural—remained unresolved.
Citações Notáveis
The Iran situation is getting out of hand, and Trump miscalculated enormously. The situation is very grim.— Francis Lun, CEO of Venturesmart Asia
A Conversa do Hearth Outra perspectiva sobre a história
Why did the Kospi's 10% jump feel so significant when futures contracts were already pointing downward?
Because the Kospi's collapse on Wednesday was so extreme—a historic single-day drop—that even a partial recovery felt like the market was finding its footing. But you're right to notice the contradiction. Asia was celebrating a rebound that Wall Street was already second-guessing. That's the lag of global markets: Asia trades first, then reacts to what happened in New York, but by the time Asia opens, New York is already looking ahead.
The oil prices seem to be the real story here. Why does everyone care so much about whether crude goes up or down?
Because oil is the transmission mechanism for the war into the real economy. If oil stays cheap, the conflict stays contained to geopolitics. But if oil spikes, it hits inflation, which hits corporate profits, which hits stock prices. It's the thing that turns a distant war into something that affects your paycheck.
The economic data looked good—faster growth, slower price increases, better hiring. Why wasn't that enough to sustain confidence?
It was good, but it was also stale. That data was from before the war really escalated. Investors were looking at a snapshot of an economy that no longer existed. The real question was whether that strength could survive if oil stayed elevated and inflation started climbing again.
Francis Lun said Trump miscalculated. What did he mean?
He was suggesting that whatever Trump did to provoke or escalate the situation with Iran had backfired—that the administration hadn't anticipated how much damage the conflict would do to markets and the economy. It's a political judgment wrapped in a market call.
So what happens next?
Everything hinges on oil. If prices stabilize or fall, markets will likely recover and the economic data will matter again. If they keep climbing, inflation becomes the real problem, and the Fed gets squeezed between supporting employment and fighting price increases. The jobs report on Friday will be the next test.