Global stocks rise on ceasefire hopes while oil nears $100

Keypoints

• Global equity markets extended gains on Friday as investors bet on the success of upcoming peace talks in Pakistan between the U.S. and Iran.
• Oil prices climbed to just below $100 a barrel amid fears that continued Israeli strikes in Lebanon and Iran’s proposed “Strait of Hormuz toll” could collapse the truce.
• Only 10 vessels have transited the Strait of Hormuz since the ceasefire began on Tuesday, highlighting a massive maritime backlog and “technical limitations” asserted by Tehran.
• Japan announced plans to release 20 days’ worth of crude reserves to mitigate supply shocks, as the nation remains 95% dependent on Middle Eastern oil.

Main Story

Equity markets from Tokyo to London showed resilience on Friday, fueled by a “wave of euphoria” following the announcement of a two-week ceasefire in the U.S.-Iran war.

Despite the destruction caused since the conflict began on February 28, indices like the Nikkei 225 and Hang Seng climbed as investors looked toward the weekend summit in Islamabad. The rally was further bolstered by reports that President Trump urged Israeli Prime Minister Benjamin Netanyahu to scale back strikes in Lebanon to safeguard the broader negotiations.

However, the “peace dividend” remains fragile. While stocks rose, the energy market told a more cautious story. West Texas Intermediate (WTI) surged toward the $100 mark as traders weighed Trump’s social media warnings against Iran’s plan to charge transit fees.

With ship traffic at less than 10% of normal volumes and only one non-Iranian tanker having passed through the Strait, supply chain normalization appears weeks, if not months, away. The IMF has already signaled a downward revision of global growth forecasts, citing the “scarring effects” of infrastructure damage and loss of market confidence.

The Issues

The primary challenge is the ambiguity of the ceasefire terms. While the U.S. and Israel maintain that strikes on Lebanon were not part of the deal, Tehran views them as a violation of the truce. This diplomatic friction must be solved to prevent a return to kinetic warfare. Furthermore, the economic bottleneck in the Strait of Hormuz creates a “lag effect” where factory gate prices—most notably in China—are rising for the first time in three years. Investors must now navigate a “two-speed” recovery where tech and retail stocks like Fast Retailing (Uniqlo) soar on strong earnings, while commodity-dependent sectors remain suppressed by high energy costs.

What’s Being Said

• “You’ll see Oil start flowing, with or without the help of Iran,” posted President Trump, warning Tehran against “dishonorable” toll-seeking.
• Michael Brown of Pepperstone noted that an Israel-Lebanon deal would significantly “increase the chances of a US-Iran deal being struck.”
• Kristalina Georgieva, IMF Managing Director, warned there will be “no neat and clean return to the status quo ante” due to spiraling energy costs.
• IG analyst Fabien Yip cautioned that the Islamabad talks “carry no guarantee of success” and details of the 10-point proposal remain sparse.

What’s Next

• Islamabad Summit: U.S. and Iranian delegations will meet this weekend in Pakistan to attempt to convert the temporary truce into a lasting framework.
• U.S. Inflation Data: Later today, the release of inflation data will provide the first clear picture of how the February–March oil spike has impacted American consumers.
• Japan Reserve Release: The Japanese government will begin the logistics of releasing a further 20 days of crude reserves next month to stabilize domestic prices.
• Washington Talks: Next week, high-level meetings between Israeli and Lebanese officials in Washington will focus on creating a secondary northern ceasefire.

Bottom Line

The global economy is currently holding its breath. While the stock market’s rise reflects a desperate hope for peace, the $100 oil price acts as a stark reminder that the world’s most critical energy artery remains under significant geopolitical pressure.

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