Iran conflict impact on Asian stocks

What happened: On Tuesday, January 7, U.S. President Donald Trump agreed to a two-week ceasefire with Iran, contingent on Iran reopening the Strait of Hormuz. This news sent global markets soaring, with Asian technology and semiconductor stocks surging, and Indian shares rallying. Airline stocks in the U.S. also soared in premarket trading, with the IATA predicting positive tailwinds but warning of a persistent jet fuel crisis.

Market impact: The ceasefire eased concerns about potential disruptions to global oil supplies, leading to a crash in crude oil prices. This benefited Asian and Indian stocks, particularly those in the tech and semiconductor sectors, which are sensitive to global trade and energy prices. Airline stocks in the U.S. also benefited from the reduced geopolitical risk, although the IATA's warning about jet fuel prices tempered gains.

What to watch next: On January 21, the U.S.-Iran ceasefire is set to expire, potentially bringing renewed tensions if Iran does not comply with the terms. Additionally, the U.S. earnings season is set to kick off in mid-January, with major banks reporting, which could provide further direction for the market. Lastly, the U.S. government shutdown, now in its third week, could escalate, potentially impacting market sentiment.