Asian stocks rise to records as Wall Street rallies, Iran truce hopes grow

Japanese shares surged to a record and other Asian markets climbed on Thursday as traders extended a relief rally built on hopes that the Iran ceasefire could hold and talks between the United States and Iran could resume. The Nikkei 225 jumped 2.4% to 59,549.59, breaking above its previous peak of 58,850.27 set on Feb. 27, 2026.

South Korea’s Kospi rose 2% to 6,215.38, Hong Kong’s Hang Seng added 1.2% to 26,269.99 and the Shanghai Composite gained 0.6% to 4,050.42. The moves followed a steadying in oil prices, a sign that investors were leaning into the view that the latest Middle East shock would not immediately spill into a broader energy crisis.

That confidence was reinforced by Wall Street’s latest records. The S&P 500 finished at 7,022.95 and the Nasdaq Composite closed at 24,016.02 on Wednesday, with both benchmarks ending at all-time highs. The S&P 500 had already fully recovered its Iran-war losses by Monday and was up 3% for the week, a sharp turnaround that shows how quickly markets have shifted from fear to relief. Investors were also encouraged by corporate earnings, which are helping justify the index levels even as geopolitical risk remains elevated.

The rally is not just about diplomacy. It is also a bet that cheaper or at least steadier oil will keep a lid on inflation expectations, reducing the chance that a fresh energy shock would complicate the Federal Reserve’s path on interest rates. That matters far beyond trading desks. If crude stays contained, airlines, shippers and manufacturers face less pressure on costs, and households avoid another squeeze at the pump. If talks fail and the ceasefire frays, those same sectors are likely to feel the reversal first.

Oil itself remained the market’s key swing factor. Prices had surged above $100 earlier in the conflict before easing as ceasefire and peace-talk hopes resurfaced, and they steadied again after Donald Trump said the war could end soon. For now, investors are pricing in a narrow but important outcome: no renewed escalation, more room for negotiations, and enough stability in energy markets to keep the stock rally alive. The risk is that this optimism rests on diplomacy holding, and the tape can turn quickly if it does not.