Markets rally as Trump signals patience in Iran peace negotiations
Oil prices drop and stocks rise as Tehran reviews US proposal mediated by Pakistan, while Washington maintains military pressure.
US President Donald Trump has indicated that Washington is prepared to resume military strikes on Tehran if Iran fails to agree to a peace deal, yet suggested the United States could wait a few days for a diplomatic response. Speaking on Wednesday, President Trump described the current negotiations as being on the "borderline" between a settlement and renewed hostilities, framing the situation as a critical juncture for de-escalation in the ongoing Middle East conflict.
The announcement triggered an immediate reaction in global financial markets, with Asian equities surging on cautious optimism regarding a potential accord. Japan’s Nikkei index rose more than 3.5 percent, while oil prices fell by over 5 percent and US stocks also posted gains. The market rally was fuelled by reports that Iran is actively examining a new US proposal aimed at ending the war, signalling a shift from immediate military action to diplomatic engagement.
Iran’s Foreign Ministry confirmed the status of the negotiations on Thursday, with spokesperson Esmaeil Baghaei stating via state-run agency Nour News that Tehran had received US views and was currently reviewing them. This confirmation aligns with the market’s positive response, as investors interpreted the delay as a sign that diplomatic channels remain open and that a resolution may be within reach.
Pakistan continues to play a central role in facilitating communications between the two nations. Islamabad reported that several rounds of dialogue have taken place based on Iran’s original 14-point framework, which outlines the conditions for a ceasefire. The deputy foreign minister in Tehran further clarified that Iran’s proposal to the US calls for the lifting of sanctions and the release of frozen funds, key economic demands that underpin the current diplomatic push.
Despite the diplomatic overtures, tensions remain high. Iran has warned that any resumption of US attacks would lead to a war “beyond the region,” underscoring the stakes involved. Meanwhile, maritime activity in the Strait of Hormuz continues, with Iran reporting that 26 vessels transited the waterway in the past 24 hours. As Washington weighs its next move, the coming days will be critical in determining whether the current pause leads to a lasting agreement or a return to conflict.
