03/04/2026
Asian stocks got off to a strong start following a late rebound on Wall Street, fueled by rising expectations that tensions and hostilities involving Iran could be de-escalated. Japan and South Korea saw solid stock gains, though trading activity across Asian markets is expected to be thin as several regional bourses are closed for holidays.
Japan’s Nikkei 225 Index rose 1.4%, while South Korea’s Kospi Index climbed 2.7%. The gains came after the S&P 500 in the U.S. reversed a 1.5% early decline to finish 0.1% higher. The key catalyst for the market turnaround was reports that Iran is drafting an agreement with Oman to monitor traffic through the Strait of Hormuz, a critical waterway that has been effectively blockaded by Iran since the outbreak of the conflict. The news pushed oil prices lower from their recent elevated levels, easing market anxiety and sparking a stock market rebound.
In currency markets, demand for the U.S. dollar — a traditional safe-haven asset — weakened as investor optimism over a de-escalation in Middle East tensions improved, pushing the greenback slightly lower against most major currencies. U.S. Treasury futures were little changed during Asian trading hours; the cash bond market was closed until the U.S. trading session, with only a half-day of trading scheduled.
Several Asian markets are shut on Friday, including Australia, New Zealand, Hong Kong, Singapore, the Philippines and Indonesia. U.S. stock markets are also closed for Good Friday, but the U.S. government is still set to release a raft of key economic data, headlined by the March nonfarm payrolls report, one of the most closely watched labor market indicators.
Looking back at Thursday’s session, U.S. stocks opened sharply lower. A speech by former President Trump on Wednesday night failed to convince investors that the Middle East conflict would end quickly, even though he had previously set a two-to-three-week timeline for wrapping up hostilities. On Thursday, Trump renewed threats to target Iran’s infrastructure, stepping up pressure on Tehran to return to negotiations.
Oil prices surged sharply on Thursday after Trump vowed to escalate hostilities against Iran in the coming weeks, pushing crude above $110 per barrel at one point. West Texas Intermediate (WTI) crude jumped 11% by the close, while the global Brent crude benchmark settled near $109 per barrel. The benchmark European diesel futures contract topped $200 per barrel for the first time since 2022, underscoring widespread market fears over potential energy supply disruptions.
Notably, the S&P 500’s late gain on Thursday broke a pattern of persistent sell-offs heading into weekends since the start of the Iran-related conflict. Previously, jittery investors had been closing positions ahead of weekends to avoid heavy losses, fearing that weekend developments could worsen the conflict and deal a heavier blow to the global economy.
Shares of Tesla Inc. fell after the electric vehicle maker reported one of its worst quarterly sales results in years, missing Wall Street estimates. The company is struggling to reverse a slump in its core automotive business and fend off intensifying competition in the global electric vehicle market.
U.S. labor market data released on Thursday painted a mixed picture. A report from Challenger, Gray & Christmas Inc. showed that announced job cuts in March rose 25% from the previous month. Meanwhile, initial jobless claims for the week ending March 28 unexpectedly fell, offering some relief to concerns over softening labor market conditions.
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