Asian stock markets rebounded Tuesday after a rally on Wall Street, as investors grew more optimistic that the conflict with Iran may be limited in duration. The recovery followed sharp losses a day earlier, when oil prices briefly surged close to 120 dollars per barrel before retreating to around 90 dollars.

Investor sentiment improved after President Donald Trump said he believes 'the war is very complete, pretty much,' while also warning of stronger action if Iran attempts to disrupt global oil supplies. Japan's Nikkei 225 jumped more than 3 percent after revised data showed the economy expanded at a 1.3 percent annual pace in the final quarter of last year, stronger than initially estimated.

Markets across Australia, South Korea, Hong Kong and mainland China also posted gains. Oil prices fell sharply in early trading, with benchmark United States crude and Brent crude both declining by more than 4 dollars per barrel. On Wall Street, the Standard and Poor's 500, the Dow Jones Industrial Average and the Nasdaq composite all ended higher after swinging between losses and gains.

Investors remain focused on oil price volatility and the risk of prolonged disruption in the Strait of Hormuz, a key shipping route for global energy supplies. Analysts warn that sustained high oil prices could fuel inflation, strain household budgets and raise the threat of stagflation, where economic growth slows while inflation stays elevated.