Markets Rally Amid Middle East Tensions as Ceasefire Definition Blurs

Markets Rise While Regional Conflicts Continue Despite Truce

Hui Jie reporting from Singapore — While a ceasefire agreement has taken hold in the Middle East, the underlying tensions remain unresolved, creating an unusual market dynamic where equities continue climbing despite ongoing geopolitical friction.

Traditionally, a ceasefire signals a complete halt to military operations between opposing forces. Yet the current situation in the region challenges this conventional understanding. Even as a truce is nominally in effect, Iran continues to target commercial vessels and seize ships operating through the Strait of Hormuz, while the United States maintains an active military blockade and has engaged Iranian vessels. Iran's parliament speaker, Mohammad Bagher Ghalibaf, stated that "reopening the Strait of Hormuz is impossible" as long as Washington's blockade persists — a condition that underscores the paradoxical nature of the current arrangement.

Energy Markets React to Uncertainty

The ambiguous security situation triggered a notable surge in crude prices on Wednesday. International benchmark Brent crude climbed more than 3% to close at $101.91 per barrel, while U.S. West Texas Intermediate futures advanced beyond 3% to settle at $92.96 per barrel. Both indexes showed modest gains in early Thursday trading.

U.S. and Asian Equities Set New Peaks

Despite the regional turbulence, financial markets displayed remarkable resilience. The S&P 500 and Nasdaq Composite both achieved fresh record highs, supported by a wave of corporate earnings announcements. Across Asia, the South Korean and Japanese benchmark indexes similarly reached record levels in early Thursday trading.

South Korean memory chip manufacturer SK Hynix reported another quarter of record-breaking profit and revenue, benefiting from surging demand for its products driven by artificial intelligence applications.

Fed Chair Nominee Proposes Inflation Measurement Shift

Kevin Warsh, President Donald Trump's nominee to lead the Federal Reserve, outlined a proposal to modify how the central bank measures inflation during congressional testimony. The Federal Reserve has traditionally relied on the core price index for personal consumption expenditures, or core PCE, which excludes volatile food and energy costs.

Warsh advocated for a more refined approach, suggesting the adoption of trimmed averages that would filter out extreme price fluctuations. "The measures I prefer are looking at things that are called trimmed averages," he explained. "We take out all of the tail-risks, all of the one-off items, and we ask ourselves whether the generalized change in prices is having second-order effects on the economy."

This proposal marks a notable shift from existing Fed methodology and could have significant implications for monetary policy decisions.

CNBC's CONVERGE LIVE event continues its second day of proceedings in Singapore, featuring prominent speakers including former Canadian Prime Minister Justin Trudeau and Singapore Exchange CEO Loh Boon Chye.