Oil remains volatile. Iran rejected the US plan to resolve the conflict and put forward its own conditions

On Wednesday, the US stock indices rose. By the end of the day, the Dow Jones Index (US30) increased by 0.66%. The S&P 500 Index (US500) rose by 0.54%. The Technology Index NASDAQ (US100) closed higher by 0.77%. The main catalyst for optimism was reports that Washington had sent Tehran a 15‑point peace proposal, sharply increasing the chances of a diplomatic exit from the Middle Eastern crisis. Against this backdrop, WTI oil prices and US Treasury yields declined, easing inflationary pressure and bringing investors back into risk assets, especially the technology sector. Semiconductor producers led the gains: AMD and Intel shares jumped more than 7%, and Nvidia added 2%, as investors once again began prioritizing growth stories amid easing inflation expectations. At the same time, the energy sector came under pressure due to the correction in oil prices, which led to declines in Exxon Mobil and Chevron shares.

European indices mostly rose. Germany’s DAX (DE40) jumped by 1.41%, France’s CAC 40 (FR40) closed down 0.36%, Spain’s IBEX 35 (ES35) gained 1.54%, while the UK’s FTSE 100 (UK100) closed up 1.42%. Investors reacted positively to signals from Washington indicating a desire for de‑escalation in the Middle East, interpreting this as the White House prioritizing the protection of the global economy from an inflationary shock. Despite Tehran’s formal rejection of the proposed ceasefire terms, the very fact that a diplomatic process had begun triggered a rally in risk assets and supported European government bonds.

WTI oil prices rose above 91.4 dollars per barrel, recovering after the sharp drop the day before. The market is being shaken by contradictory signals: while the Trump administration claims that “positive negotiations” are continuing through Pakistani intermediaries, Tehran officially rejected the American “15‑point plan.” Instead, Iran issued a counter‑ultimatum consisting of five conditions, including full recognition of its sovereignty over the Strait of Hormuz and payment of war reparations. This diplomatic stalemate, combined with new Iranian missile strikes on infrastructure in Kuwait and Saudi Arabia, brought the risk premium back into the market, overriding the temporary optimism from news of a possible ceasefire. Although Iran selectively allows passage for ships from “friendly” countries, US allies in the Asia‑Pacific region are already facing real shortages. The Philippines declared an energy emergency, and Australia and South Korea have reported hundreds of cases of fuel shortages at gas stations.

Asian markets also rose mostly yesterday. Japan’s Nikkei 225 (JP225) increased by 2.87%, China’s FTSE China A50 (CHA50) rose by 1.17%, Hong Kong’s Hang Seng (HK50) gained 1.09%, and Australia’s ASX 200 (AU200) posted a positive result of 1.85%.

The AUD remained at a seven‑week low below 0.695 US dollars, reflecting growing investor pessimism regarding a peaceful resolution of the Middle Eastern crisis. Statements from the RBA added fuel to the fire: Deputy Governor Chris Kent warned that the global oil shock puts the regulator in a difficult position. Since the war with Iran is simultaneously accelerating inflation and suppressing economic growth, the RBA intends to focus on preventing inflation expectations from becoming “entrenched,” which implies tighter monetary policy.