Tensions between the US and Iran have intensified, with both sides ramping up military preparations. According to reports, the US Department of Defense is accelerating the development of a "decisive strike" plan targeting Iran. The multi-pronged strategy includes strikes on Iran’s key oil export hubs and vital islands, blockading or seizing Iranian oil tankers in the Strait of Hormuz, executing ground operations deep inside Iran to seize highly enriched uranium from nuclear facilities, and launching large-scale airstrikes to cut off Iran’s access to nuclear materials. While the White House has described ground operations as still "hypothetical," military readiness efforts are being expedited.
In response, Iran has initiated high-intensity preparations. Military sources indicated that if the US attempts to militarily reopen the Strait of Hormuz, Iran will continue its blockade. Iran has reportedly mobilized more than one million combat personnel, ready for ground engagement with US forces. Iranian Army Commander Ali Jahan Shahi warned that ground combat would be "more dangerous and costly" for the enemy, emphasizing that Iranian forces are fully prepared to repel any offensive.
Iran also launched the 82nd round of its "True Promise-4" operation, employing missiles and drones to strike US bases in Kuwait, Saudi Arabia, Bahrain, and the UAE, as well as targeting Israeli military assets and nuclear infrastructure.
US President Donald Trump denied media reports suggesting he is eager to reach a diplomatic resolution, insisting that it is Iran seeking to restart negotiations. He stated that any cessation of hostilities depends on Iran and that US airstrikes will continue in the meantime. Trump also announced a 10-day pause in strikes on Iranian energy facilities, set to expire at 8 PM ET on April 6, citing progress in ongoing negotiations. He referred to Iran’s allowance of 10 oil tankers through the Strait of Hormuz as a "major gift" to the US.
Iran has formally responded to a US-proposed 15-point ceasefire plan via intermediaries, outlining five non-negotiable conditions: an end to enemy aggression and terrorism, creation of objective conditions to prevent future conflict, a clear commitment to war reparations, cessation of hostilities by all regional resistance groups, and recognition of Iran’s sovereign rights over the Strait of Hormuz. Informed sources suggest Iran views US negotiation efforts as a deceptive tactic aimed at projecting a peace-seeking image, stabilizing global oil prices, and buying time for a potential ground invasion in southern Iran.
In commodity markets, international oil prices surged significantly. WTI crude futures rose 4.61%, while Brent crude futures climbed 5.66%. In contrast, gold and silver prices declined, with spot gold falling 2.78% to $4,380.49 per ounce and silver dropping 4.5% to $68.10 per ounce.
US stock indices fell sharply, with the Nasdaq down 2.38%, entering correction territory after a more than 10% decline from recent highs. The S&P 500 dropped 1.74%, and the Dow Jones fell 1.01%.
Asia-Pacific markets also saw broad declines. In China, the Shanghai Composite Index fell 1.09%, the Shenzhen Component Index dropped 1.41%, the ChiNext Index declined 1.34%, and the STAR Composite Index lost 1.83. Combined turnover across Shanghai, Shenzhen, and Beijing exchanges totaled approximately 1.96 trillion yuan, down about 236 billion yuan from the previous session. Nearly 4,500 stocks closed lower.
In Hong Kong, the Hang Seng Index fell 1.89%, while the Hang Seng Tech Index dropped 3.28%. Key decliners included Kuaishou, down nearly 14%, and Pop Mart, down over 10%. Japanese and South Korean markets also retreated, with the Nikkei 225 falling 0.27% and the KOSPI dropping 3.22%. Since the onset of US-Israel-Iran tensions, global investors have withdrawn approximately $52 billion from Asian emerging markets excluding China, marking a record monthly outflow.
Analysts from Morgan Stanley noted that rising energy supply risks in Asia, a strong US dollar, and profit-taking in tech stocks have exacerbated the market decline.
Futures on Chinese stock indices also fell, with the CSI 300 index futures down 1.2%, SSE 50 index futures down 0.97%, CSI 500 index futures down 1.8%, and CSI 1000 index futures down 1.53%.
Market analysts suggest that recent volatility stems from shifting expectations around geopolitical risks. Shenwan Hongyuan Futures analyst Jia Tingting noted that brief rebounds in A-shares earlier in the week were driven by US signals favoring negotiations, which reduced perceived geopolitical risk and boosted global risk appetite. She emphasized that A-shares’ underlying logic remains intact, supported by policy easing, ample liquidity, and corporate earnings. However, a breakdown in US-Iran talks or a hawkish shift by the Fed could dampen sentiment.
Chen Shangyu, macro-financial group director at GF Futures, echoed that de-escalation in Middle East tensions has been a key factor supporting market rebounds. He cautioned that prolonged conflict could risk global recession, though recent diplomatic gestures reduce that likelihood.
Looking ahead, analysts advise monitoring three key variables: Middle East tensions, Federal Reserve policy, and China’s Q1 economic data and corporate earnings. Short-term, a cautious approach is recommended to avoid geopolitical and data-related volatility. Long-term investors may consider buying on dips in quality assets, betting on policy support and economic recovery.
Chen also warned that April earnings releases may intensify sector divergence, with fundamentals driving market trends. Investors should avoid frequent trading and refrain from aggressive positioning based on short-term reversals.
Yang Delong, chief economist at Qianhai Open Source Fund, argued that while Middle East tensions have pushed up oil prices and affected some industries, they will not derail A-shares’ "slow-bull" market. He cited three core supports: continued policy stimulus, household savings flowing into equities, and global capital inflows attracted by China’s tech innovation—all unrelated to Middle East conflicts. He recommends a patient, medium-to-long-term strategy with equity exposure maintained between 50% and 60%.
