MSCI’s broadest index of Asia-Pacific shares outside Japan was up more than 2% after dropping for three straight sessions

Asian stocks snapped a three-day losing streak on Tuesday as oil prices retreated from a one-month high on mediation efforts in the Middle East, and investors braced ​for corporate earnings that will test an under-pressure AI trade.

There were increased attacks between Iran and the U.S., even as efforts were being made to revive a fragile ceasefire.

Brent ​crude futures eased 0.74% to $88.56 per barrel on Tuesday as investors latched on to hopes of a resolution. Brent hit a one-month high of $91.42 a barrel ​in the previous session.

I think we’ve got a really strange situation that investors are still trying to look at things ⁠with a glass half full view, as we’ve seen this all before a few months ago and want the same outcome, said Nick Twidale, chief market ​strategist at ATFX Global in Sydney.

Twidale said concern that things could get out of hand and the conflict escalate across the region had to be growing. Feel we ​might see one catalyst that pops things and then we are off to the races, he said.

In stocks, MSCI’s broadest index of Asia-Pacific shares outside Japan was up more than 2% after dropping for three straight sessions. Japan’s Nikkei added almost 3% while KOSPI advanced 4.5%.

This looks more like a relief rally than an all-clear signal, said Charu Chanana, chief investment strategist at ​Saxo. The rebound can continue if oil stays contained and tech earnings validate AI spending, but both assumptions remain fragile.

World stocks, led by chipmakers, have been hit by severe volatility in recent weeks as investors fret about high valuations, profit growth and ‌whether the ⁠investment in AI infrastructure will yield tangible results.