Asia stocks rally, oil skids as investors reassess Mideast risk

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Asia stocks bounce, oil slips as Iran anxiety ebbs

SYDNEY - Asian shares rebounded on Tuesday as investors’ reassessed the risk of an all-out conflict between the United States and Iran, while Wall Street battled back to the black as tech stocks climbed.

“Oil traders have been unwinding their hedges, thinking that Iran’s economic hardships would deter an attack on any oil infrastructure in that it would likely freeze out any existing Iranian exports and put the economy into an even deeper hole,” said Stephen Innes, chief Asia market strategist at AxiTrader.

Equities went the other way as MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.7%, recouping almost all of Monday’s losses. Yet U.S. Defense Secretary Mark Esper told Pentagon reporters that no decision had been made and the military said the letter was only a poorly worded draft. “We think the longest U.S. expansion on record still has plenty of legs,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets. “To be sure, Iran adds an additional layer of complexity.”

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Why has Iran anxiety ebbed? Who says it's ebbed? Iran said they would retaliate after three days of mourning. Anxiety should be very high about now.

Well... that de-escalated quickly

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