US stocks, along with Asian markets, surged in early trading on Friday following US President Donald Trump’s announcement of a peace deal with Iran.
The Dow Jones Industrial Average rose 1.75 per cent, while the Nasdaq Composite gained 2.54 per cent.
However, some experts are treating the announcement with caution, citing President Trump’s history of inconsistent statements on the issue.
Rick Meckler, a partner at Cherry Lane Investments in New Jersey, said, “Is it one more false lead, or is it really coming to an end?” He added, “The biggest weight on the market remains the war and its impact on inflation, particularly energy. And if it were to end, it obviously is a real positive.”
Similar positive sentiment was seen across Asian markets, which rallied on hopes that a Middle East peace deal may finally materialise. The dollar and bond yields dropped, while oil prices fell to their lowest levels in two months, easing inflation fears.
However, analysts remain wary as the Trump administration has repeatedly followed a pattern of announcing peace measures on Fridays only for escalations to resume early the following week, keeping global markets in uncertainty.
All eyes are also on the hotly awaited market debut of Elon Musk’s SpaceX, which made history with the biggest-ever initial public offering.
The IPO raised a record $75 billion, valuing the rocket and spacecraft manufacturer at $1.77 trillion and making Musk the world’s first trillionaire.
Ray Attrill, head of FX strategy at National Australia Bank, said, “If we hear something from Iran that sounds positive, the odds of a peace deal are clearly going to flip quite dramatically.”
Markets remain closed over the weekend, raising questions over whether Friday’s gains will hold when trading resumes on Monday.
Also read: Crude oil prices fall as Trump calls off further strikes on Iran
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