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Most global stock markets fell Thursday while oil prices edged higher for a second consecutive day. Investors remained cautious amid fragile Iran-Israel ceasefire developments and fresh remarks from US President Donald Trump suggesting he is preparing to replace Federal Reserve Chair Jerome Powell, raising expectations for interest rate cuts.
Market sentiment was also dampened by ongoing uncertainty around the US trade agenda, with few countries finalising deals to avoid looming tariffs set to return after the July 9 deadline.
Despite the shaky truce in the Middle East, Trump announced plans to hold nuclear talks with Iran next week. This came after he claimed recent US strikes had delayed Iran’s nuclear programme by “decades.” Iranian President Masoud Pezeshkian reiterated Tehran’s willingness to negotiate but maintained the country’s right to peaceful nuclear energy.
Crude prices, which dropped sharply earlier in the week following news of the ceasefire, continued to recover. West Texas Intermediate rose 0.5 percent to 65.23 dollars per barrel, while Brent crude climbed 0.4 percent to 67.92 dollars.
Kai Wang, Asia equity strategist at Morningstar, said the ceasefire remains fragile.
“While the Israel-Iran conflict is now de-escalating, we still believe that geopolitical risks remain where the ceasefire could easily fall apart,” Wang said. “Given that oil has retreated to pre-conflict levels, we believe any future increase in oil price is likely to be short-lived.”
Stock markets across Asia were mostly lower. Hong Kong, Shanghai, Sydney, Singapore, Seoul, Jakarta and Wellington all posted losses, while Tokyo and Taipei bucked the trend with modest gains.
The mixed performance followed a subdued session on Wall Street. The Nasdaq was the standout index, bolstered by a more than four percent surge in Nvidia, which hit a new record high. The chipmaker’s valuation soared to around 3.76 trillion dollars, surpassing Microsoft and Apple to become the world’s most valuable company.
In currency markets, the dollar lost ground after Trump intensified his criticism of Jerome Powell and revealed he had a shortlist of potential replacements. Powell’s term as Fed chair ends in May 2026, but Trump’s comments signalled he may announce a successor as early as September or October.
“I know within three or four people who I’m going to pick,” Trump said. “He [Powell] goes out pretty soon fortunately because I think he’s terrible.” Trump went further, calling Powell “average mentally” and claiming he had a “low IQ for what he does.”
Potential candidates reportedly include Treasury Secretary Scott Bessent, economic adviser Kevin Hassett, and former Fed governor Kevin Warsh.
Trump’s remarks followed Powell’s recent comments to lawmakers that the Fed needed more time to evaluate the impact of tariffs before adjusting monetary policy.
Rodrigo Catril of National Australia Bank said Trump’s rhetoric increases pressure on Powell to cut rates.
“It’s fair to suggest that the pressure on Powell to cut rates will increase, and that’s adding to selling pressure on the dollar,” Catril said.
Key figures at 0230 GMT:
Tokyo – Nikkei 225: up 1.1 percent at 39,349.85 (break)
Hong Kong – Hang Seng Index: down 0.6 percent at 24,334.44
Shanghai – Composite: down 0.1 percent at 3,451.62
Euro/dollar: up at 1.1685 from 1.1656 on Wednesday
Pound/dollar: up at 1.3692 from 1.3664
Dollar/yen: down at 144.74 yen from 145.32 yen
Euro/pound: up at 85.34 from 85.26 pence
West Texas Intermediate: up 0.5 percent at 65.23 dollars per barrel
Brent North Sea crude: up 0.4 percent at 67.92 dollars per barrel
New York – Dow: down 0.3 percent at 42,982.43 (close)
London – FTSE 100: down 0.5 percent at 8,718.75 (close)
