Amid heightened market volatility, some positive signals are emerging. Over the past weekend, many market professionals called for greater attention to the risks stemming from the ongoing Middle East conflict. This morning, turbulence in Asia-Pacific markets intensified significantly. In early A-session trading, most stocks experienced sharp declines, with the exception of coal, photovoltaic, and certain new energy shares. South Korea’s stock market briefly triggered a circuit breaker, while Japan’s Nikkei 225 index fell by nearly 5% at one point. Precious metals such as gold and silver also saw notable declines, though losses moderated later in the session.
A major development also emerged from the United States. According to AXIOS, a U.S. official and a source familiar with the matter revealed that after three weeks of conflict, the Trump administration has begun preliminary discussions on the next phase of the war and potential formats for peace talks with Iran. Meanwhile, Deutsche Bank strategist Jim Reid reviewed the performance of U.S. stocks following 30 major geopolitical events and found that the average low point for the S&P 500 typically occurs around three weeks after the initial shock. The market is now approaching this window, with the median maximum drawdown in past events standing at approximately -6%.
Following sharp declines in Japanese and South Korean markets, A-shares also opened with increased volatility. The three major A-share indices each fell more than 2% at one point, with the Shanghai Composite Index dropping below the 3,900 mark. Sectors such as nonferrous metals, computing hardware, and semiconductor chips led the declines, with over 5,200 stocks falling across the Shanghai, Shenzhen, and Beijing exchanges. The FTSE China A50 Index futures extended losses to 2%, while the Hang Seng Tech Index fell by 3% intraday.
In contrast, green power concept stocks showed repeated strength.立新能源 surged to a limit-up,华电辽能 had earlier hit the upside limit,东方新能 touched the涨停板, and浙江新能 and豫能控股 followed with gains. Photovoltaic and energy storage stocks also demonstrated relative resilience. The coal sector was active early in the session, with the coking coal futures contract briefly hitting a limit-up gain of around 11%.
Notably, after the sharp decline in indices, a modest rebound emerged. At the same time, gold and silver—which had fallen sharply in overseas markets—also saw their losses narrow significantly. U.S. stock futures appeared more resilient, with the US30 futures contract turning positive during the session.
Further updates on the Middle East conflict continued to surface. According to AXIOS, a U.S. official and an informed source indicated that after three weeks of hostilities, the Trump administration has initiated preliminary talks regarding the next phase of the conflict and possible formats for peace negotiations with Iran. President Trump stated on Friday that he is considering a "phased end" to the war, though U.S. officials expect fighting to continue for another two to three weeks. Meanwhile, Trump’s advisors are preparing for diplomatic mediation. Sources revealed that Trump’s envoys, Kushner and Witkoff, are involved in discussions on potential diplomatic pathways. Any agreement to end the war would need to include the reopening of the Strait of Hormuz, resolution of Iran’s stockpile of highly enriched uranium, and long-term arrangements regarding Iran’s nuclear program, ballistic missiles, and support for regional proxies.
Additional sources indicated that although Egypt, Qatar, and the UK have acted as intermediaries between the U.S. and Iran, there has been no direct contact between the two sides in recent days. Egypt and Qatar have informed the U.S. and Israel that Iran is willing to negotiate, though its conditions are stringent—including a ceasefire, guarantees against future conflict, and reparations.
As the market approaches the typical three-week low point following geopolitical shocks, the question arises: when will the bottom form, and how significant will the impact be on Chinese markets? This morning, views from several international financial institutions were circulated. Goldman Sachs’ Asia-Pacific ex-Japan chair expressed considerable optimism toward South Korea’s market and noted that energy factors have a limited impact on China. Deutsche Bank’s Jim Reid reiterated that the S&P 500 has historically bottomed around three weeks after a shock, with a median maximum decline of about -6%. He added that markets typically recover most of their losses within 34 days after the initial shock.
Independent research firm Variant Perception also suggested that market sentiment may be nearing a turning point, with uncertainty likely peaking in the coming days. The firm noted that the recent simultaneous slump in gold and equities signals market de-risking and forced liquidation—often a precursor to a market bottom. Michael Hartnett, a strategist at Bank of America, pointed out that while the market has not yet fully "capitulated," it is approaching a critical juncture. He believes the optimal time to increase risk exposure is when roughly 88% of global equity indices fall below both their 50-day and 200-day moving averages. While the S&P 500 has already reached this level, global markets may need to fall another 3–5% to trigger a buy signal. Hartnett estimates that if oil prices retreat below $100 per barrel, confidence in re-adding risk assets would strengthen.
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