Asian benchmarks are mixed in cautious trading amid uncertainty about US-Iran ceasefire talks

Hong Kong's Hang Seng lost 1.2% to 26,180.51, while the Shanghai Composite gained 0.5% to 4,106.26.

On Wall Street, the S&P 500 erased an early rise to fall 0.6% after U.S. Vice President JD Vance called off a trip to Pakistan, where he was expected to lead U.S. negotiators in talks with Iran to extend the ceasefire. It closed at 7,064.01.

The Dow Jones Industrial Average dropped 0.6% to 49,149.38. The Nasdaq composite also slipped 0.6%, to 24,259.96. Less than 10 minutes after the U.S. stock market finished trading for the day Trump said he would extend the ceasefire to give Iran time to submit a proposal to end the war.

Oil prices have been wavering. In Asian trading Wednesday, benchmark U.S. crude fell 86 cents to $88.81 a barrel. Brent crude, the international standard, lost 68 cents to $97.80.

The moves were milder than the vicious swings that rocked Wall Street earlier in the war, when the price for a barrel of Brent crude briefly topped $119 and the S&P 500 dropped nearly 10% below its prior all-time high.

The U.S. stock market remains near its most recent record, which was set Friday, indicating investors remain optimistic that the United States and Iran will avoid a worst-case scenario for the economy.

Much of the tension in financial markets has focused on what will happen to the Strait of Hormuz, a narrow waterway off Iran’s coast that oil tankers use to exit the Persian Gulf. Japan, for instance, imports just about all its oil, and much of it previously came through the strait. The government has released its oil reserves and is working on alternative routes.

“Trump’s decision essentially extends the uneasy status quo rather than resolving the conflict. While the pause has reduced immediate tail risks, the absence of a genuine breakthrough means traders remain inclined to tiptoe rather than trade with real conviction,” said Tim Waterer, chief market analyst at KCM Trade.

In the bond market, the yield on the 10-year Treasury climbed to 4.31% from 4.26% late Monday, and the gains accelerated late in the day with oil prices.

In currency trading, the U.S. dollar edged down to 159.15 Japanese yen from 159.38 yen. The euro cost $1.1751, up from $1.1744.

Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama