Global financial markets surged on Wednesday as optimism grew over a potential resolution to the Iran conflict, following explicit statements from US President Donald Trump that American forces would leave Iran within two to three weeks, regardless of a formal agreement with Tehran [1][2][3][7][8]. Iranian President Masoud Pezeshkian also signaled willingness to de-escalate regional tensions if specific guarantees are met [1][3][7]. This shift in geopolitical risk drove risk-sensitive assets higher, with the AUD/JPY climbing to around 110.10 for a second consecutive day [1], EUR/JPY reaching session highs above 183.80 [2], and EUR/USD extending gains to near 1.1600 as demand for safe-haven assets diminished [3].
US equity futures rallied, with Dow Jones futures up 0.64% to near 46,900, S&P 500 futures rising 0.72% to 6,620, and Nasdaq 100 futures up 1.06% to 24,170 during European hours [7]. The previous US session saw the Dow Jones climb nearly 2.5%, S&P 500 gain 2.9%, and Nasdaq 100 surge 3.43%, marking their strongest daily performance since May [7][8]. Technology stocks led the advance, with Meta jumping 6.7% and Marvell Technology surging nearly 13% after a strategic partnership and $2 billion investment from Nvidia [7].
Treasury yields fell as investors shifted away from safe havens, with the 10-year yield down more than 3 basis points to 4.275%, the 2-year yield dropping over 4 basis points to 3.758%, and the 30-year yield up more than 2 basis points at 4.869% [8]. Gold extended gains for a third session, moving above $4,700/oz, but remains vulnerable after a nearly 12% decline in March, its worst monthly performance since 2008 [5]. ING analysts noted that gold’s rebound is driven by peace hopes, but liquidity and US dollar risks persist [5].
On the macroeconomic front, Eurozone manufacturing PMI was revised up to 51.6 for March, marking a 44-month high and supporting the Euro [2]. In Australia, the RBA Commodity Index SDR climbed 12.8% YoY in March, the strongest increase since January 2023, while China’s PMI eased to 50.8 from 52.1 [1]. Japan’s Tankan Large Manufacturing Index rose to 17 in Q1 2026, beating expectations and supporting the BoJ’s gradual rate hike stance [1][6]. Societe Generale analysts highlighted robust non-manufacturing sector resilience in Japan, with financial conditions remaining comfortably loose [6].
BoJ policymaker Toichiro Asada commented that rising oil prices pose upside inflation risks and create stagflationary trends, but noted no immediate response by the Yen after his remarks [4]. Meanwhile, markets are pricing a 64% probability of an RBA rate hike to 4.35% at the next meeting, as elevated energy prices complicate Australia’s policy outlook [1].
Forward-looking statements include ING’s caution that gold remains exposed to liquidity squeezes and US dollar strength, and Societe Generale’s expectation that Japanese business managers may revise inflation outlook upward in the next Tankan survey [5][6]. US traders are also watching upcoming retail sales, ADP employment, and ISM manufacturing data for further market cues [8].
CONCLUSION
The de-escalation of Middle East tensions and US plans for a swift withdrawal from Iran have triggered a broad risk-on rally across global markets, with equities, risk-sensitive currencies, and commodities responding positively. While optimism prevails, analysts warn that lingering inflation risks and vulnerabilities in safe-haven assets like gold could shape future market moves. Investors remain focused on upcoming economic data and central bank actions for further direction.