Global markets saw risk appetite somewhat recover amid expectations of a lasting peace in the Middle East and positive earnings by artificial intelligence (AI) and tech sectors easing concerns, while all eyes turned to the US' Personal Consumption Expenditures (PCE) index and growth data to be released on Thursday.
The absence of any negative developments, and gradually normalizing controlled tanker traffic via the Strait of Hormuz supported the expectations that the US-Iran talks could reach lasting peace, easing supply concerns over oil.
US President Donald Trump said on social media that Tehran had told him no transit fees were being charged for ships transiting the strait. US Energy Secretary Chris Wright said around 72 ships with 20 million barrels of oil aboard transited the Strait of Hormuz in the last 24 hours.
These developments led Brent crude oil to fall 0.6% at $72.9 per barrel, potentially resulting in reassessments of inflation and growth outlook forecasts.
With the ceasefire deal remaining in effect, hull damage insurance premiums fell by more than half, further accelerating the decline in oil prices.
Following these changes, expectations that global inflationary pressure may ease came to the fore, weakening the possibility that the Fed may hike rates.
The expectations of two rate hikes by year-end eased, while investors continued to estimate a single rate cut scenario this year.
Meanwhile, Micron Technology, one of the leading semiconductor and memory chip makers, posted better-than-expected earnings, easing concerns over high AI valuations and cash flow constraints, as the firm reported a quarterly revenue of $41.46 billion.
Micron's shares rose around 13% in after-hours trading, providing much needed-relief to the markets.
Investors remain skeptical over the sustainability of end-user demand for AI firms, while these firms are still expected to maintain high growth performance as long as demand remains strong both by consumers and enterprises.
Analysts say that the US PCE and growth data to be released will give insight into the future trajectory of US inflation and test whether economic activity remains strong.
The US current account posted a deficit of $226.8 billion in the first quarter, up 2.6%, while new home sales in the country fell 7.3% month-on-month in May, below estimates.
The US 10-Year Treasury yield fell around 10 basis points on Wednesday to 4.4%, while it is trading flat on Thursday. The US Dollar Index was on an upward trend due to hawkish expectations over the Fed's monetary policy but it slightly eased 0.1%, currently at 101.5% on Thursday.
Gold dipped below $4,000 per ounce for the first time since November 2025, declining 0.1% to $3,995 on Thursday.
The S&P 500 fell 0.1% and the Nasdaq 0.43%, while the Dow Jones rose 0.35% on Wednesday. American indexes kicked off Thursday mixed.
Meanwhile, European stock markets sought direction amid Middle East developments and the tech sector.
NATO Secretary General Mark Rutte said Iran's access to nuclear weapons would threaten the whole world.
At the same time, Germany's business sentiment rose from 85 points to 85.6 in June following successive downward revisions to economic growth forecasts, signaling a recovery for the second consecutive month.
The UK's FTSE 100 rose 0.31% and France's CAC 40 0.54%, while Germany's DAX 40 fell 0.62% and Italy's FTSE MIB 30 0.74% on Wednesday. European markets opened Thursday on a mixed trend.
Conversely, Asian markets traded positively amid Micron's better-than-expected earnings, easing concerns over the AI and tech sectors, with rising investor appetite in the US' after-hours market spilling over to Asia on Thursday.
South Korea's Kospi Index saw a rapid recovery trend with a 6% surge as shares of SK Hynix rising 13% amid expectations that it will debut in the Nasdaq.
Japan's leading index Nikkei 225 exceeded expectations with a 4.5% rise to 116.1.
At the same time, China's Shanghai Composite Index climbed 0.3% but Hong Kong's Hang Seng Index fell 1.6% near the close.
