Trump says Israel, Hezbollah agree to halt fighting; Iran talks continue at 'rapid pace'

Equities fluctuated as investors assessed the likelihood of a Middle East peace agreement as US-Iran talks stuttered, while Donald Trump and Israel's Benjamin Netanyahu gave mixed signals over ending Israel's attacks in Lebanon.

While Wall Street ended with more tech-led records, traders took a breather in Asia following a recent strong run-up, with attention also turning to the release of US jobs data at the end of the week.

With uncertainty continuing to hang over the crisis, Asian equity traders moved cautiously after a healthy, tech-fuelled run-up that has pushed some markets to record highs.

Seoul, which has been at the forefront of the rally this year, dropped almost two percent, while Tokyo was off more than one percent, having also hit fresh new peaks.

Shanghai, Sydney and Wellington were down, though there were gains in Hong Kong, Singapore, Taipei, Manila and Jakarta.

That came on the back of records for all three main indexes on Wall Street that came as chip titan Nvidia rocketed more than six percent after unveiling a powerful laptop chip for Windows machines.

Traders are also awaiting the release of key US jobs figures on Friday, which should provide a fresh snapshot of the US economy as rising energy prices sends inflation rising.

They will also be the first under new Federal Reserve boss Kevin Warsh after he last month replaced Jerome Powell, who was constantly rebuked by Trump for not cutting interest rates enough.

At an emergency UN Security Council meeting on Monday, most members — with the exception of the United States — called for Israel to pull its forces out of southern Lebanon and avoid further escalation, according to The New York Times.

The session, convened at France’s request, came amid rising tensions and mass displacement in Lebanon, where tens of thousands fled their homes as shelters became overcrowded following warnings of imminent Israeli strikes on Beirut’s southern suburbs.

The day also saw Israel advancing further into southern Lebanon, fuelling fears of a widening military operation and deepening panic across the country.

Ebrahim Azizi, chair of Iran’s parliamentary national security committee, has warned of serious repercussions for Israel and US forces in the region if Israeli strikes in Lebanon continue.

In a post on X, he said: “If the attacks against Lebanon do not stop completely, the consequences will be severe for the Zionist regime and US forces in the region.”

He added: “They are fully aware that this is not an empty threat, and we are prepared for a military response.”

The Israeli military said air defences intercepted two projectiles from Lebanon, hours after US President Donald Trump announced that fighting would end.

"Following the sirens that sounded at 01:35 (2235 GMT) in several areas in northern Israel, the IAF intercepted two projectiles that crossed from Lebanon into Israeli territory," the military said on Telegram.

A "suspicious aerial target" that later fell in Israeli territory near the Lebanese border was also identified it said, adding that no injuries were reported.

It came after Trump announced he had persuaded Israel and Hezbollah to de-escalate.

The Islamic Revolutionary Guard Corps (IRGC) has claimed it fired a cruise missile at a Panama-flagged container ship, identifying it as the “US-owned” MSC Sariska V, Iranian media reported.

The operation was described by the IRGC as retaliation for an earlier strike near the coast of Oman targeting an Iranian vessel.

The claim comes amid reports of a separate incident in the Arabian Gulf, where a cargo ship was hit by an unidentified projectile, causing a large explosion off Iraq’s coast and prompting an investigation.

The US naval blockade continues to choke Iran, with 121 ships redirected and five "disabled" so far as of June 1, according to the Central Command (CentCom), which oversees US military operations in the Gulf and Middle East.

The move ensures "compliance" to the US naval blockade of Iranian ports, initiated on April 13, 2026, under orders from President Donald Trump following the collapse of nuclear negotiations.

The blockade "remains in full effect", CentCom stated, adding their forces as strictly enforcing it against all vessels attempting to enter or exit Iranian ports along the Arabian Gulf and Gulf of Oman.

The blockade aims to economically pressure Iran by restricting its oil exports and imports through its ports.

Iran's parliamentary speaker Mohammad Bagher Ghalibaf threatened to halt negotiations and confront Israel if its military operations in Lebanon continue, amid heightened regional tensions.

Ghalibaf said he had phone call with Nabih Berri, speaker of Lebanon's parliament, in which emphasised solidarity with Hezbollah and Lebanese allies. "If the Zionist regime's crimes in Lebanon persist, we will not only stop the talks but will stand against them," he posted on X.

He concluded with chants of "Long live the resistance! Long live the defense of the motherland! Long live the brotherhood of the Iranian and Lebanese nations!"

The statement comes against the backdrop of Israel's ongoing campaign against Hezbollah in southern Lebanon, part of broader 2026 hostilities that have included direct Iran-Israel exchanges.

Iran has long provided support to the Hezbollah, the powerful Iran-backed militia that has long operated as a "state within a state".

The group, listed as a terrorist organisation by the UAE, the GCC, the US, the UK and several other countries, is a key proxy in Iran's narrative of "axis of resistance" against Israel.

Ghalibaf, a prominent hard-liner and former IRGC commander, plays a key role in Iran's strategic messaging and past ceasefire talks. His remarks underscore Tehran's willingness to escalate support for allies despite diplomatic pressures.

Iranian state media has released dramatic footage purporting to show missile launches carrying messages directed at the United States, in what analysts view as a calculated show of force amid increasingly fragile negotiations between Washington and Tehran.

The video, aired Monday by the state broadcaster Islamic Republic of Iran Broadcasting (IRIB), emerged just days after US and Iranian forces exchanged fire in the Gulf and as President Donald Trump reportedly returned revisions to a proposed agreement aimed at extending a regional ceasefire.

CNN reported that it could not independently verify where or when the footage was recorded, a reminder of the information warfare increasingly accompanying the military confrontation. Still, the symbolism of the video appears difficult to miss: Iran signaling that even while negotiations continue, its missile forces remain active and central to its deterrence strategy.

Earlier this year, Iranian outlets released missile videos mocking Trump following threats of military action against Tehran.

Crude oil futures held near multi-month highs on Tuesday (June 2, 2026), with US benchmark WTI trading around $92 per barrel and international Brent near $95 as of 8.07am Tokyo, as lingering fallout from the US-Israel-Iran conflict continues to disrupt critical Middle East energy flows.

The elevated prices reflect persistent supply fears more than three months into regional hostilities that effectively closed the Strait of Hormuz — the narrow chokepoint carrying roughly one-fifth of global seaborne oil — and triggered production shut-ins across multiple Gulf nations.

The status of ongoing US-Iran peace negotiations remained unclear on Tuesday as both sides issued conflicting statements on whether talks were advancing or on the verge of "collapse", deepening uncertainty over the future of the Strait of Hormuz and Iran’s nuclear enrichment program.

Fresh doubts emerged after Iranian state-linked media reported that Tehran had suspended indirect message exchanges with Washington following renewed Israeli military operations in Lebanon.

Israeli National Security Minister Itamar Ben-Gvir has publicly urged Prime Minister Benjamin Netanyahu to reject pressure from US President Donald Trump and avoid concessions to Iran, exposing growing divisions within Israel's ruling coalition over ongoing peace negotiations.

“Time to say no to Trump,” Ben-Gvir stated, arguing that Israel should not accept any agreement that leaves Iran with nuclear capabilities or preserves the influence of Tehran-backed groups across the Middle East.

The remarks come as Washington seeks to broker a broader settlement with Iran following months of conflict that disrupted regional energy supplies and threatened shipping through the Strait of Hormuz.

US negotiators have reportedly pushed for a framework involving limits on Iran’s uranium stockpile, security guarantees in the Gulf and the reopening of key maritime routes.

The Trump administration continues to rapidly release oil from America’s emergency stockpile in a bid to ease the supply crisis caused by the war with Iran, reports CNN.

According to Energy Department data released on Monday, the Strategic Petroleum Reserve lost another 8 million barrels of crude last week alone.

That’s down from 9.1 million barrels the week before and a record-setting 9.9 million the week ending May 15.

Israeli Prime Minister Benjamin Netanyahu said on Monday he told US President Donald Trump that his country would strike Beirut if Hezbollah doesn't stop attacking Israel.

"I spoke this evening with President Trump and told him that if Hezbollah does not cease attacking our towns and our citizens, Israel will strike terrorist targets in Beirut," Netanyahu said, according to a statement released by his office.

"Our position on this remains unchanged. At the same time, the IDF will continue to operate as planned in southern Lebanon," he added.

Lebanon's US embassy said on Monday that Hezbollah had accepted a US proposal for a "mutual cessation of attacks", after Israel threatened more strikes on south Beirut on the eve of a fourth round of Israel-Lebanon negotiations.

The announcement came after US President Donald Trump said Monday he had persuaded Israel and Hezbollah to de-escalate, with Prime Minister Benjamin Netanyahu agreeing not to send troops to southern Beirut and the Lebanese militant group promising to stop attacks.

"The Lebanese authorities received confirmation of Hezbollah's acceptance of the US proposal providing for a mutual cessation of attacks," said an embassy statement published by Lebanese President Joseph Aoun's office.

It said the confirmation came after a telephone call between Aoun and US Secretary of State Marco Rubio.

On Sunday, a senior US official had told AFP that Rubio spoke with Aoun and Netanyahu about the ongoing diplomatic negotiations.

Day 94: Kuwait intercepts missiles, drones; Iran halts US talks

Day 93: Trump asked for tougher terms in proposed Iran war deal

Day 92: Hormuz disruption raises summer fuel shortage fears

Day 91: Trump wraps Iran talks without announcement

Day 90: US, Iran reach deal pending Trump's final approval

Day 89: Trump says 'not satisfied' yet on Iran deal

Day 88: Iran condemns US attacks as violation of ceasefire

Day 87: 'Proceeding nicely': US-Iran talks intensify, oil drops

Day 86: US-Iran talks: Trump says 'I don’t make bad deals'

Day 85: Trump: Iran deal ‘largely negotiated’, Hormuz to open