Contradictory signals from the US and Iran, Asia-Pacific stock markets surged then fell, South Korean stocks once hit another record high, Brent crude erased all losses.

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Trump announced that the US will guide ships from neutral countries through the Strait of Hormuz and stated that "very positive" progress has been made in US-Iran negotiations. This announcement caused dramatic market swings during Monday’s Asian trading session—stocks surged but gains narrowed, and oil prices rebounded quickly after a sharp drop, reflecting investors’ deep doubts about whether the situation in the Middle East can truly improve.

On Monday (May 4), South Korea’s Kospi index surged 2.8% in early trading, hitting a new intraday record high, with Samsung Electronics and SK Hynix rising 1.8% and 3.6%, respectively, as main drivers; the Kosdaq index rose 2.2% simultaneously. MSCI Asia-Pacific Index rose 1% to 259.24 points.

In US stock futures, S&P 500 and Nasdaq 100 futures briefly rose in early trading before turning mostly flat, and Dow Jones futures narrowed their gains to about 27 points or 0.1%. Notably, Japanese and mainland Chinese stock markets are both closed today for a holiday.

Meanwhile, Brent crude oil once fell 2.4% to $105.55 per barrel, before quickly erasing losses and rebounding above $108; US benchmark WTI crude futures also first dropped over 2%, briefly fell below $100 per barrel, then turned up 0.1% to about $102.

However, optimism quickly cooled off by Iran. An Iranian senior official said any “interference” by the US in the Strait of Hormuz would constitute a violation of the ceasefire agreement, putting pressure on the market’s rally.

Rodrigo Catril, Sydney strategist at National Australia Bank, said, “Details are always key, but this is a positive signal showing both sides are willing to seek common ground.” He also noted that whether optimism can last is “hard to judge, as we’ve experienced similar moments before.”

Trump announces escort plan amid mixed US-Iran negotiation signals

According to CCTV News, Trump posted on social media that the US will launch a plan starting Monday to assist ships from neutral countries safely through the Strait of Hormuz, describing those countries as “victims of circumstances.”

Additionally, reports say US Central Command later confirmed it will deploy Navy destroyers and more than 100 land and sea-based aircraft to support merchant ships seeking free passage, but did not disclose specific implementation details.

Meanwhile, Trump said talks with Iran are “very positive” and may yield “very positive results for all parties,” but gave no specifics. It was reported that Iran has received the US response to its latest proposal via Pakistan and is reviewing it. Iran’s proposal demands a full end to the conflict within 30 days and includes US military withdrawal from around Iran, lifting of the maritime blockade, lifting of sanctions, and payment of compensation.

However, Trump had previously downplayed Iran’s latest peace proposal, and doubts remain in the market about whether negotiations will yield substantive breakthroughs. Last Sunday, it was also reported that a cargo ship was attacked near the Strait of Hormuz, further increasing uncertainty in the situation.

Bloomberg strategist Mark Cranfield pointed out that conflicting reports have confused traders about the actual role of the US Navy—current descriptions are closer to a coordination mechanism rather than substantive physical protection, which is a notable gap from initial market expectations.

Joe Gilbert, portfolio manager at Integrity Asset Management, warned, “The market shows tremendous patience towards this level of uncertainty, as it focuses on prospects after the conflict ends, which may be overly optimistic. Substantial economic damage will become more apparent within the next month.”

South Korean stocks lead Asia-Pacific rally, tech shares are biggest winners

In the Asia-Pacific market, South Korean stocks performed particularly well. Since the start of this year, the tech-heavy Kospi index has risen over 60%, ranking among the top major global indices.

This time, signs of easing in the Strait of Hormuz situation boosted core targets in the AI industry chain, such as Samsung Electronics and SK Hynix, driving the Kospi to a new intraday record high.

Despite continued geopolitical risks, US stocks ended last Friday strongly—S&P 500 and Nasdaq Composite both set new record highs and posted their fifth consecutive week of gains.

According to Bloomberg compiled data, about 81% of S&P 500 component companies’ Q1 earnings exceeded expectations, with tech giants particularly outstanding: Alphabet’s net profit rose 81% year-over-year, Amazon rose 77%, Meta rose 61%.

Jon Adams, chief investment officer at Calamos Wealth Management, said, “As long as earnings and profit margins continue to deliver, the stock market’s rally will not be interrupted.”

This week, investors’ attention will turn to quarterly results from consumer companies like McDonald’s and Walt Disney to assess the real situation of US consumers, and await Friday’s release of the April nonfarm payroll report and other labor market data earlier in the week.

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