Most stock markets rose on Monday as oil prices tumbled after Donald Trump announced an "energy ceasefire" between Russia and Ukraine, offsetting a fresh wave of Houthi attacks on Saudi Arabia.
Both main crude contracts sank more than 1% following the US president's declaration, even as it sparked astonishment in Kyiv, which also said Moscow had struck multiple power plants in the country.
"Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine," Trump said early yesterday (11 October) on Truth Social. "Both parties have agreed. Do not break it!"
His post came after he called on Ukrainian President Volodymyr Zelensky to halt attacks on Russian refineries and said it was "time for Ukraine to get a new president" who would finally settle the war.
Zelensky appeared to express surprise at the announcement, saying he was seeking further details, but added that "Ukraine supports the ceasefire, and it is important that Russia support it as well".
Russia has yet to confirm its agreement.
While the announcement was welcomed by Ukraine's allies, Trump had come under fire after declaring a temporary easing of US sanctions on Russian diesel, which European leaders and Kyiv said would only embolden Russian President Vladimir Putin.
The drop in oil prices reversed an initial spike that came in response to Houthi attacks on Saudi Arabia at the weekend.
At least a dozen people were killed at Riyadh's international airport on Saturday — the deadliest attack on Saudi soil for more than a decade — and another person died following a second strike on Sunday.
The assaults marked a sharp escalation in the Yemen war, where Riyadh has long provided military support to the internationally recognised government against the Houthis.
The Iran-backed group on Sunday claimed multiple attacks over the previous 24 hours and threatened to continue targeting the kingdom's transit hubs, calling them "a theatre of operations for our forces".
"The market is no longer paying full geopolitical premium on every headline, and that is probably the most useful signal in the morning price action," wrote SPI Asset Management's Stephen Innes.
"A strike matters if it threatens real barrels, shipping lanes, refining capacity or insurance costs; otherwise, the market is getting increasingly reluctant to pay up simply because the geopolitical ticker flashes red.
"The physical market remains tight enough to keep Brent above $100, but futures are refusing to treat every new escalation as the start of another straight-line inflation shock."
The drop in oil prices supported most Asian markets, with Hong Kong, Sydney, Singapore, Wellington and Manila all rising.
But Seoul and Taipei were dragged down by losses in chipmakers SK hynix, Samsung and TSMC. Tokyo was closed for a holiday.
US futures were sharply higher.
Investors are also preparing for the release of key US inflation and retail sales data, which could play a major role in the Federal Reserve's interest rate decisions. The bank is due to meet at the end of October.
The start of the earnings season is also in focus this week, with banking giants JP Morgan, Goldman Sachs and Bank of America due to report.
Technology giants will follow later in October and in November, with traders keen to gauge the outlook for the AI sector given the vast sums of money pumped into it in recent years.