US stocks higher as geopolitical tensions unwind - Newsquawk Asia-Pac Market Open

US stocks were broadly higher, as Monday's increased geopolitical tensions unwind somewhat. The US stated that the ceasefire with Iran remains in place, despite the Iranian activity towards the UAE yesterday. General Caine noted recent actions remain below the threshold for a resumption of major military operations, helping to ease risk sentiment and weigh on crude. Sector strength was led by Technology and Materials, while the VIX declined.
Highlights include New Zealand Job Report (Q1), South Korean Inflation (Apr), Chinese Caixin Services PMI (Apr), Indian Manufacturing & Services PMI, Supply from Australia.
Japanese markets closed for Constitution Day.

More Newsquawk in 2 steps:

1. Subscribe to the free premarket movers reports

2. Trial Newsquawk’s premium real-time audio news squawk box for 7 days

Click for the Newsquawk Week Ahead.

IRAN CONFLICT

Israel is coordinating with the US as escalating tensions in the Strait of Hormuz have put the Iran ceasefire at risk,according to an Israeli source cited by CNN. The coordination includes preparation for a potential new round of strikes on Iran, which would focus on energy infrastructure and targeted killing of senior Iranian officials.
Israel conveyed a message to Washington that the security and military leadership wants to resume attacks on Iran,according to Al Jazeera citing Israeli Broadcasting sources. Israel believes that negotiations with Iran are a waste of time.
US President Trump reiterated that Iran has no anti-aircraft capability and no leaders, adding that Iran is not doing well and must not be allowed to obtain a nuclear weapon. Trump later stated that "you'll find out" when asked what the US would do if Iran violated the ceasefire.
US Secretary of State Rubio said Iran must come to negotiating table and accept terms.On the Strait, Rubio said the US will continue to clear passageway through the Strait to restore freedom of navigation.
US War Secretary Hegseth said Project Freedom is separate from Epic Fury, it is temporary.The US aims to protect shipping from Iranian aggression. We are not looking for a fight, Iran is the clear aggressor. He later quoted that the ceasefire is not over.
US General Caine said Iran has fired at commercial vessels nine times and seized two container ships since the ceasefire was announced and that they continues to launch attacks on its neighbouring countries. Caine added that the Iranian attacks have all been below the threshold of restarting major combat operations at this point.
US President Trump appears to soften stance on Iran's missile programme,WSJ reported citing an radio interview. Trump said his focus was on preventing Iran from obtaining a nuclear weapon in an attempt to play down the chances of being able to impose strict caps on Tehran's missile program.
The two US commercial ships that crossed the Strait of Hormuz on Monday had military security aboard,according to NBC citing sources.
The US White House reportedly told Iran of the impending US operation to "guide" ships through the Strait of Hormuz on Sunday,Axios reported citing a US official. the report also stated that the US warned Iran not to interfere.
Iranian Foreign Ministry Spokesperson denied the UAE's accusation that Iran fired missiles and drones at it, stating that Iran's defensive actions were exclusively directed at the US.This came following an announcement by theUAE stating that its air defences are currently engaging with missile attacks and incoming drones from Iran.
Iranian President Pezeshkian has requested an immediate and emergency meeting with Supreme Leader Khamenei to ask him to stop IRGC attacks on Persian Gulf nations and prevent a recurrence,Iran International reported. Pezeshkian reportedly outlined that the IRGC attack on the UAE occurred without the knowledge of the government.
Iran has implemented a new mechanism for ship transits in the Strait of Hormuz,according to Press TV.
Pakistan's Foreign Ministersaid that "consultations are ongoing to end the conflict, and we are hopeful that we will succeed".
US CENTCOM said that 51 vessels have been directed to turn around or return to port in order to stop commercial ships from entering or leaving Iran.
UKMTO said it has received a report of an incident within the Strait of Hormuz and verified source reported a cargo vessel hit by unknown projectile.
US embassy renewed its call for its citizens to leave Iraq, Iranian-backed factions are planning to attack Americans in Iraq, according to Al Hadath.
Israeli cities and towns are to prepare for the possibility of the conflict resuming,according to Al Hadath citing Yedioth Ahronoth.

US TRADE

US stocks were broadly higher, as Monday's increased geopolitical tensions unwind somewhat. The US stated that the ceasefire with Iran remains in place, despite the Iranian activity towards the UAE yesterday. General Caine noted recent actions remain below the threshold for a resumption of major military operations, helping to ease risk sentiment and weigh on crude. Sector strength was led by Technology and Materials, while the VIX declined.
Advanced Micro Devices Inc. (AMD) Q1 2026 (USD): Adj. EPS 1.37 (exp. 1.28), Revenue 10.3bln (exp. 9.88bln), Q2 revenue view 11.2bln (exp. 10.5bln).
SPX +0.81% at 7,259, NDX +1.31% at 28,015, DJI +0.73% at 49,298, RUT +1.75% at 2,854.
Click here for a detailed summary.

TARIFFS/TRADE

EU Trade Chief Sefcovic called for swift return to agreed Turnberry tariff terms from US. He added that it would be beneficial if main features of EU-US trade deal are in line ahead of 1-year anniversary.
French President Macron said all options are being considered in response to US tariff threats,hoping for a reasonable outcome in trade relations between France and the US.

CENTRAL BANKS

ECB's Lane said future projected temperature increases could push up the response of food prices to Summer heat further.
ECB's Villeroy said ECB will raise rates if second-round effects are seen and not seeing sufficient signs yet to raise rates.
RBNZ Financial Stability Report: New Zealand's financial system is resilient and well positioned to support households and businesses even if economic conditions soften.

NOTABLE HEADLINES

US President Trump said him and China President Xi have a good relationship with the US doing a lot of business with China. Will talk about Iran with Xi, Xi has been very nice about Iran, has been very respectful and not been challenged.
Abu Dhabi is reportedly considering the creation of a new entity for defence deals, according to Bloomberg.

DATA RECAP

US JOLTs Job Openings (Mar) 6.866M vs. Exp. 6.87M (Prev. 6.882M, Low. 6.6M, High. 7.1M).
US ISM Services PMI (Apr) 53.6 vs. Exp. 53.8 (Prev. 54.0, Low. 53, High. 55.2).
US ISM Services Prices (Apr) 70.7 (Prev. 70.7).
US ISM Services Business Activity (Apr) 55.9 (Prev. 53.9).
US ISM Services Employment (Apr) 48.0 (Prev. 45.2).
US ISM Services New Orders (Apr) 53.5 (Prev. 60.6).
US S&P Global Composite PMI Final (Apr) 51.7 vs. Exp. 52.0 (Prev. 50.3).
US S&P Global Services PMI Final (Apr) 51.0 vs. Exp. 51.3 (Prev. 49.8).
US Balance of Trade (Mar) -60.30B vs. Exp. -59.0B (Prev. -57.3B).
US Imports (Mar) 381.2B (Prev. 372.1B).
US Exports (Mar) 320.9B (Prev. 314.8B).
Canadian Balance of Trade (Mar) 1.78B vs. Exp. -2.8B (Prev. -5.74B).
Canadian Imports (Mar) 70.99B (Prev. 72.05B).
Canadian Exports (Mar) 72.77B (Prev. 66.31B).

FX

DXY was mostly weaker vs. G10 FX as US data and Middle East dominated the tape. The US is seemingly trying to play down the recent Iranian attacks, with General Caine saying they have all been below the threshold of restarting major combat operations at this point, while Hegseth stressed the ceasefire still stands. On the data footing, ISM Services declined more than expected, while prices remain unchanged, against an expected rise. JOLTS surprisingly fell, Balance of trade was a deeper deficit than Wall St. consensus, and new home sales jumped. However, the greenback was little moved following the data.
EUR and GBP saw slight gains in light currency-specific newsflow, although there were a couple of central bank speakers. ECB's Villeroy said the central bank will raise rates if second-round effects are seen, and not seeing sufficient signs yet to raise rates.
JPY was the clear G10 laggard, and only one seeing losses against the Greenback as USD/JPY retreated from earlier lows seen in the week. USD/JPY traded between 157.08-89, with sharp two-way moves seen, with no clear explanation for either direction.
Antipodeans were the clear outperformer as risk-tone gradually improved throughout the session. Overnight, the RBA hiked rates by 25bps, as expected, whilst the accompanying statement was net-hawkish. In the press conference, Governor Bullock suggested the policy can allow them to wait and see, which resulted in markets pricing out the chance of a near-term hike.
SNB's Martin said the SNB has greater willingness to intervene on FX.

FIXED INCOME

T-notes were bid across the curve on Tuesday, with yields declining as oil prices fell. The US stated that the ceasefire with Iran remains in place, despite reports of further Iranian activity towards the UAE, albeit at a reduced scale compared to prior sessions. General Caine noted that recent actions remain below the threshold for a resumption of major military operations, helping to ease geopolitical risk and weigh on oil prices. However, reports do note that if operations were to resume, US and Israel have a list of Iranian energy facilities they could target.
Germany sells EUR 0.993bln vs exp. EUR 1.0bln 2.10% 2029 and EUR 0.483bln vs exp. EUR 0.5bln 2.50% 2035 Green Bunds.

COMMODITIES

Oil prices were lower, as Middle East headlines dominated the tape. There was plenty of newsflow through the day, with the highlight being the US seemingly trying to play down the recent Iranian attacks. Trump remarked that Iran knows what not to do, and when asked what would violate the ceasefire, said "you'll find out", but that the US does not want to go and kill people. In addition, General Caine, on Iranian attacks, said they have all been below the threshold of restarting major combat operations at this point, while Hegseth stressed the ceasefire still stands. Despite saying that from the US, Israel reportedly conveyed a message to Washington that the security and military leadership wants to resume attacks on Iran, and Israel believes that negotiations with Iran are a waste of time. On the day, WTI and Brent was pretty choppy through the European morning to hit highs of USD 100.92/bbl and 114.44/bbl, respectively, before gradually grinding lower through the US afternoon to see WTI hit a trough of USD 97.33/bbl and Brent USD 109.60/bbl.
Saudi Arabia sets June Arab Light Crude oil OSP to Asia at plus USD 15.50/bbl (prev. + USD 19.50/bbl in May) vs Oman/Dubai average, to NW Europe at plus USD 25.85/bbl (prev. +USD 27.85/bbl) to ICE Brent Settlement, to US at plus USD 14.60/bbl (prev. + USD 14.60/bbl) vs ASCI.
Weekly private inventory data (bbls): Crude -8.1mln (exp. -2.8), Gasoline -6.1mln (exp. -1.7mln), Distillates -4.6mln (exp. -2mln), Cushing -1.1mln.
Russia's Kirishi oil refinery has halted oil processing following Ukrainian drone attacks, according to reports citing sources.
Iraq is offering term buyers discounts of USD 33.40/bbl on Basrah Medium for May loading, according to Bloomberg citing a 3rd of May notice.

GEOPOLITICAL

RUSSIA-UKRAINE

The Head of the Office of the President of Ukraine Budanov said Ukraine will extend its truce if Russia reciprocates.

ASIA-PAC