Main developments
Donald Trump said Iran’s president has asked for a ceasefire, which he would not agree to unless the Strait of Hormuz was first reopened.
Iran rejected the claim, calling it “false and baseless”. The Revolutionary Guards said the strait would not reopen based on Trump’s “ridiculous displays”.
Markets rallied, and Brent crude settled 2.7 per cent lower at $101.16 a barrel, on optimism that the US may be close to winding down the war.
European stocks had their best day for a year, with the Stoxx Europe 600 closing 2.4 per cent higher. The S&P 500 closed 0.7 per cent higher, a day after posting its biggest one-day jump in 10 months.
Trump also said in an interview that the US would be “out of Iran pretty quickly” and threatened to quit Nato.
The US president is set to address the nation later on Wednesday.
Military action continued. Israel struck targets in Iran and Lebanon, while an oil tanker was hit by a missile in Qatari waters.
US stocks chalk up back-to-back gains for first time in a fortnight
US stocks notched up their first back-to-back gains in a fortnight after investors upped their bets on a sooner than expected end to the Iran war.
The S&P 500 closed 0.7 per cent higher on Wednesday and the tech-heavy Nasdaq Composite added 1.2 per cent. Both indices on Tuesday jumped by the most in about 10 months.
Memory chip stocks fared best, with Micron Technology, SanDisk and Western Digital all rising more than 8 per cent. Nike was the biggest faller, down 15 per cent after the retailer provided a gloomy year-ahead outlook.
Iran’s president warns of generational effects of war in letter to Americans
Iran’s president has written a defiant letter to Americans, urging them to question the purpose of the US’s war against his country.
While he did not openly call for negotiations, Masoud Pezeshkian said: “Continuing along the path of confrontation is more costly and futile than ever before,” adding “the choice between confrontation and engagement” would have consequences that last for generations.
Iranians have “no enmity” towards the US, Europe or other countries, and Iran’s perception as a threatening nation had been manufactured “in order to justify pressure, maintain military dominance, sustain the arms industry and control strategic markets”, he wrote in a letter posted on X.
Pezeshkian said Iran was acting in “legitimate self-defence” and that attacks against the country’s infrastructure were planting “seeds of resentment that will endure for years”.