Global equity markets have climbed back to record highs after a volatile six-week period dominated by geopolitical tensions.
Investor sentiment has improved on signs of easing conflict risks and renewed focus on economic fundamentals.
Fresh optimism has emerged around potential US-Iran peace talks, with the Trump administration signalling hopes for a deal.
A Pakistani mediator has reportedly arrived in Tehran, raising expectations of diplomatic progress.
With tensions appearing to ease, investors are increasingly shifting attention back to corporate performance and macroeconomic trends.
Earnings strength supports market momentum
The latest rally has been supported by strong corporate earnings, particularly from major US banks.
Results from firms such as Bank of America and Morgan Stanley have exceeded expectations, helping lift major US indices to new highs on Wednesday.
More than 80% of companies that have reported earnings so far this quarter have beaten analysts’ forecasts.
This has reinforced confidence in the resilience of corporate performance despite recent geopolitical disruptions.
Attention is now turning to the technology sector, with Taiwan Semiconductor Manufacturing Company reporting another earnings beat, further boosting sentiment around global growth prospects.
Asia markets and global indices hit fresh highs
Global equities have rallied broadly, with MSCI’s all-country index reaching a new high on Thursday.
Asian markets also posted strong gains, with Japan’s Nikkei rising 2.5% to a record close and South Korea’s KOSPI advancing more than 2%.
The gains reflect investor confidence that the global economy, particularly the tech sector, has absorbed the shocks stemming from the Iran conflict.
Oil steady as geopolitical outlook improves
Oil prices have remained relatively stable, staying below the key $100 per barrel mark amid improving geopolitical sentiment.
However, both Brent and WTI crude edged higher by over 1% on Thursday, trading around $96 and $92 per barrel, respectively.
Media reports are suggesting that Iran may allow ships to pass through the Omani side of the Strait of Hormuz as part of proposals to the United States have also contributed to easing supply concerns.
Dollar weakens as safe-haven demand fades
The US dollar has continued to decline, hovering near six-week lows and extending losses for an eighth consecutive session on Wednesday.
The currency has unwound much of its safe-haven gains accumulated during the Iran conflict.
This shift reflects reduced demand for defensive assets as market sentiment improves.
China growth beats forecasts despite mixed signals
China’s economy showed resilience in the first quarter, with GDP growth coming in at 5.0%, surpassing economists’ expectations of 4.8%.
The data places growth at the upper end of the country’s full-year target range of 4.5% to 5.0%.
However, underlying indicators painted a mixed picture, with slower retail sales and industrial output growth in March.
China’s early-year momentum has been supported by strong exports, although rising energy costs linked to geopolitical tensions could pose risks to future growth.
Political uncertainty remains in focus
In the United States, political developments continue to draw attention.
President Donald Trump has renewed his criticism of Federal Reserve Chair Jerome Powell, threatening to remove him if he does not step down from the Fed board after his term ends next month.
Meanwhile, congressional hearings for Fed Chair nominee Kevin Warsh are scheduled to begin next week, which could further influence market sentiment.
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