Trump's remarks trigger a surge in global stock markets, but weak trading volume suggests the rally is fragile

Glonghui, April 1st｜Although President Trump's remarks about "withdrawing troops within three weeks" sparked a retaliatory rebound in global stock markets, deep concerns about the global economic outlook remain beneath the surface of market prosperity. On Wednesday, the MSCI Asia Pacific Index recorded its largest single-day gain since April 2025, while the STOXX Europe 600 Index also rose by 2.5%. However, sluggish trading volumes revealed the fragility of the rebound—for example, trading volume in the Korean Composite Index was only 80% of the monthly average. Investors worry that, even if the US withdraws its troops, the blockade of the Strait of Hormuz will remain a long-term drag on fundamentals. Currently, although Brent crude oil has fallen back below $100, it is still about 37% higher than before the war. Analysts at Goldman Sachs and Mizuho Securities point out that the structural rise in energy costs will squeeze corporate profits and weaken purchasing power. Particularly in emerging Asian markets that rely on energy imports, capital outflows reached as much as $68 billion last month, far exceeding the scale seen in the early stages of the pandemic. As earnings season approaches, the substantial damage the war has done to corporate profits is about to be revealed, which could end the current "rebound" at any time.