Japan's Nikkei 225 index soared more than 3% on Thursday, closing above the 61,000 mark for the first time in history, as Asia-Pacific markets rallied despite renewed geopolitical tensions in the Middle East [1]. The Nikkei 225 advanced 3.72%, while the broader Topix index gained 1.91% [1]. Other regional markets also saw gains: Australia's S&P/ASX 200 rose over 1%, and South Korea's Kospi added 1.17%, although the small-cap Kosdaq Index slipped 0.4% [1].
The market rally came after U.S. President Donald Trump issued fresh threats against Iran, warning that military action would escalate if Tehran did not agree to a peace deal [1]. Trump stated that the U.S. military offensive, Operation Epic Fury, would end if Iran accepted the terms already agreed upon, and that the U.S. naval blockade of Iranian ports in the Gulf of Oman would be lifted, allowing the Hormuz Strait to be open to all, including Iran [1]. Despite these tensions, investors appeared to focus on the potential for diplomatic resolution, with reports suggesting Washington and Tehran were nearing an agreement to end the war [1].
In commodity markets, West Texas Intermediate crude futures for June rose 0.92% to $95.95 per barrel as of 7:19 p.m. ET [1]. Hong Kong's Hang Seng index futures were at 26,423, up from the previous close of 26,213.78 [1].
U.S. markets also responded positively to developments in the Middle East. The S&P 500 advanced 1.46% to 7,365.12, and the Nasdaq Composite gained 2.02% to close at 25,838.94, with both indexes reaching new record highs [1]. The Dow Jones Industrial Average added 612.34 points, or 1.24%, to close at 49,910.59 [1]. However, U.S. stock futures were little changed, with S&P 500 and Nasdaq 100 futures both slipping about 0.1%, and Dow Jones Industrial Average futures falling 35 points, or less than 0.1% [1].
CONCLUSION
Asian and U.S. equity markets rallied strongly, with Japan's Nikkei 225 reaching a historic milestone, as investors looked past ongoing Middle East tensions and focused on the potential for diplomatic progress between the U.S. and Iran. The positive sentiment was reflected in record closes for major U.S. indexes and broad gains across Asia-Pacific markets.