Iran ceasefire on life support, but market volatility is alive and kicking

Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

After weeks of insisting that the Iran ceasefire remained intact (despite both sides continuing military strikes during the truce), U.S. President Donald Trump finally acknowledged what had been increasingly difficult to ignore: The situation in the region may be deteriorating again.

Trump has repeatedly claimed that Washington “has all the cards” against Tehran. But with a high-stakes meeting with the Chinese President looming later this week, the next move may not belong to Washington alone.

Despite repeatedly declaring Iran’s military defeated and insisting that Washington “has all the cards” in the conflict, U.S. President Donald Trump has yet to force Tehran to come to a deal.

On Tuesday, he admitted the ceasefire was “on life support” and “unbelievably weak”, marking the clearest sign yet that tensions in the region could escalate after weeks of insisting that peace was holding.

Oil prices reacted immediately. Brent futures rose nearly 3% and topped $104 per barrel. U.S. West Texas Intermediate futures for June delivery also climbed 3% to close at $98.07 per barrel.

To put things in perspective, crude prices have risen more than 40% since the U.S. and Israeli-led war against Iran started on Feb. 28.

To blunt the impact, Trump and congressional Republicans are floating a suspension of the federal gas tax, hoping to ease pump prices ahead of the midterm elections.

Still, even if the temperature in the region comes down, energy executives warn the damage to oil flows may linger well beyond the conflict itself.

“If the Strait of Hormuz opens today, it will still take months for the market to rebalance, and if its opening is delayed by a few more weeks, then normalization will last into 2027,” Saudi Aramco CEO Amin Nasser told investors on the company’s first-quarter earnings call.

However, it seems investors largely looked past these shocks. Both the S&P500 and Nasdaq Composite reached new highs, extending Wall Street’s remarkable ability to compartmentalize global crises.

Attention now shifts to China, where a veritable entourage of high-powered CEOs is expected to accompany Trump for his summit with Chinese President Xi Jinping. Attendees include Tesla CEO Elon Musk, Apple CEO Tim Cook, and BlackRock’s CEO Larry Fink, according to a White House official.

Notably absent from the guest list: Nvidia CEO Jensen Huang.

Elsewhere in Asia, Treasury Secretary Scott Bessent is in Japan for meetings with Prime Minister Sanae Takaichi and Finance Minister Satsuki Katayama.

According to public broadcaster NHK, discussions are expected to include Iran, rare…