Asian markets gained in early trading Tuesday as Middle East tensions remained high, but at least didn’t rise any higher.

U.S. Defense Secretary Mark Esper on Monday said U.S. troops are not planning on pulling out of Iraq, despite the release of a draft letter than suggested as much, and also said that despite threats from President Donald Trump, the U.S. would not target Iranian cultural sites if further hostilities break out.

U.S. stocks gained Monday after a mid-session rally, and crude oil prices, which had surged the past two trading days since a U.S. airstrike killed a top Iranian general in Iraq, retreated Tuesday amid the geopolitical lull. Gold prices

GCG20, +0.13%

  also fell from a seven-year high Monday.

Japan’s Nikkei

NIK, +1.60%

  jumped 1.4%, and Hong Kong’s Hang Seng Index

HSI, +0.52%

  rose 0.5%. The Shanghai Composite

SHCOMP, +0.69%

  edged up 0.4% while the Shenzhen Composite

399106, +1.31%

  advanced 0.8%. South Korea’s Kospi

180721, +0.95%

 gained 1%. Stocks rose in Singapore

STI, +0.73%

 , but fell in Taiwan

Y9999, -0.61%

 and were about flat in Indonesia

JAKIDX, -0.09%

 . Australia’s S&P/ASX 200

XJO, +1.35%

  rose 1.2%.

Among individual stocks, Sony

6758, +3.17%

  gained in Tokyo trading, as did auto makers such as Toyota

7203, +1.98%

 , Honda

7267, +2.73%

 and Mazda

7261, +2.30%

 . In Hong Kong, casino operator Galaxy Entertainment

27, +2.41%

  rose; along with tech giant Tencent

700, +2.65%

 . Samsung

005930, +0.54%

  advanced in South Korea, while Oil Search

OSH, +2.35%

 and Westpac

WBC, +1.15%

  gained in Australia.

“The positive sentiment is likely to continue for the remainder of the day as the underlying drivers of the stock market rally, the search for yield and global economic recovery, reassert themselves,” Jeffrey Halley of Oanda said in a commentary. “Only geopolitical headlines surprises from the Middle East are now likely to derail the rally.”

Gold has climbed more than $40 since before Soleimani’s killing. Historically, it has performed well in times of military conflict, such as the two Persian Gulf wars and the Sept. 11, 2001 attacks, even after taking into account interest rates and the dollar’s movements, according to Goldman Sachs commodities analysts.

Oil prices also gave up some of their recent big gains on Tuesday, with benchmark U.S. crude

CLG20, -0.65%

 dropping 75 cents to $62.52 per barrel. It gained 22 cents to $63.27 per barrel on Monday. Brent crude

BRNH20, -0.73%

 , the international benchmark, lost 85 cents, or 1.2%, to $68.06 per barrel. On Monday it added 31 cents to $68.91 per barrel.

In currency trading, the dollar

USDJPY, -0.05%

  rose to 108.50 Japanese yen from 108.33 yen on Monday.

On Wall Street, after dropping 0.6% as soon as trading opened, the benchmark S&P 500

SPX, +0.35%

  pushed steadily higher through the day, recovering half its sharp loss from Friday. It climbed 0.4% to 3,246.28, while the Dow Jones Industrial Average

DJIA, +0.24%

  gained 0.2% to 28,703.38. The Nasdaq composite

COMP, +0.56%

  rose 0.6%, to 9,071.46.

Apart from waiting for next steps in the clash between the United States and Iran, several big economic reports are on the schedule this upcoming week that could move markets. The headliner is Friday’s jobs report from the government.

Solid jobs growth has helped support the U.S. economy, even as trade wars hurt manufacturing around the world. Economists expect Friday’s report to show that employers added 155,000 jobs last month. The healthy job market is one of the reasons the S&P 500 soared to its second-best showing in 22 years in 2019. Big moves by central banks around the world to shield the economy from the pain of trade wars also were big factors.

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2020-01-06