Global stock markets showed gains on Monday, while oil prices experienced a significant drop exceeding $4 following a statement from U.S. President Donald Trump about progress in talks aimed at ending the war with Iran.
Market Performance
In Europe, France’s CAC 40 increased by 1.1% to 8,203.32. Germany’s DAX rose by 1.0% to reach 25,148.39, and Britain’s FTSE 100 went up by 0.2% to 10,466.26. U.S. markets remained closed due to the Memorial Day holiday.
Asian markets also saw an upward trend. Japan’s Nikkei 225 surged 2.9%, closing at 65,158.19. Australia’s S&P/ASX 200 increased by 0.4% to 8,692.00, and the Shanghai Composite climbed nearly 1% to 4,152.57. Markets in South Korea and Hong Kong were closed for holidays.
U.S.-Iran Negotiations
The U.S. is reportedly closing in on an agreement with Iran. This deal would potentially end the ongoing conflict, allow the reopening of the Strait of Hormuz, and lead Iran to relinquish its stockpile of highly enriched uranium. Details and timelines of this agreement are still under discussion, according to regional officials consulted by the Associated Press.
The reopening of the Strait of Hormuz is crucial as its closure has restricted oil tankers’ movement from the Persian Gulf, affecting global crude deliveries. Japan, heavily reliant on oil imports, routes most of it through this strait.
“Markets are rapidly transitioning from pricing geopolitical fear toward pricing a potential peace dividend as Hormuz reopening expectations pressure oil and the dollar lower,” commented analyst Stephen Innes.
Impact on Oil and Currency
On Friday, the S&P 500 had a gain of 0.4%, the Dow added 0.6%, and the Nasdaq rose by 0.2%. The benchmark U.S. crude oil price fell by $4.77, over 4%, bringing it to $91.83 a barrel. Brent crude, the global standard, dropped by $4.86 to $98.68 a barrel.
Currency markets reflected these developments; the U.S. dollar decreased to 158.95 Japanese yen from 159.16 yen. The euro strengthened, moving up from $1.1605 to $1.1644.
Recent U.S. earnings reports, which exceeded analysts’ expectations, are contributing to market positivity. Despite these gains, concerns about inflation remain due to the prolonged conflict.
Reported by Yuri Kageyama. For more updates, follow on Threads: https://www.threads.com/@yurikageyama