<\/p>\n
Global stocks climbed to approach a record high as crude oil fell after officials signaled the US was nearing a deal with Iran to reopen the Strait of Hormuz and restore oil flows. The dollar weakened.<\/p>\n
The MSCI All Country World Index, the broadest measure of global equities, rose 0.3% to trade near an all-time high reached earlier this month. A gauge of Asian shares gained 1.4%. Japan\u2019s Nikkei index jumped over 3% to a record, with tech stocks rallying. Futures contracts for the S&P 500 rose 0.9% to a record.<\/p>\n
The moves came as Brent dropped over 5% to $97.70 a barrel, the lowest in more than two weeks, amid optimism a deal will help resume the flow of oil through the vital Middle East artery.<\/p>\n
Cheaper oil prices and lower inflation expectations helped lift Treasury futures, with cash trading closed Monday due to a US holiday. Government bond yields in Japan and Australia also fell. Markets in Hong Kong and London are also shut. The dollar weakened against all of its Group-of-10 peers. Non-interest-bearing assets such as gold and silver climbed as lower inflation lifts chances for interest-rate cuts.<\/p>\n
Senior US officials said Sunday that the US and Iran were nearing a deal that would reopen the Strait of Hormuz, though negotiations over key language were continuing and final approval from both sides could still take several days. However, Iran\u2019s Tasnim news agency cautioned that the draft agreement could yet collapse because the US is obstructing some key clauses, including Tehran\u2019s demand that its assets be unfrozen.<\/p>\n<\/p>\n
The improvement in risk sentiment follows weeks of stalemate between the US and Iran after several previous efforts to strike a deal. Global equities have since surged to record highs on optimism that Middle East tensions may ease and on renewed enthusiasm for the AI trade, while elevated oil prices and higher inflation pushed bond yields to multi-year highs.<\/p>\n
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\u201cThe market has been in that mode of looking beyond Iran war for a month or so,\u201d Allspring Portfolio Manager Alison Shimada said on Bloomberg TV. \u201cI am interested in positioning for what goes on beyond the lower price of oil, because I think both sides do want some kind of negotiated end to the war.\u201d<\/p>\n
While the US and Iran closed in on a deal, President Donald Trump said he won\u2019t \u201crush\u201d into an agreement. The deal is still a work in progress and the US is going to give diplomacy every chance to succeed, Secretary of State Marco Rubio said.<\/p>\n
\u201cWe thought we might have some news last night. Maybe today, I wouldn\u2019t read too much into it,\u201d he said regarding the lack of news, noting that it takes time to hear back.<\/p>\n
What Bloomberg\u2019s Strategists Say\u2026<\/p>\n
\u201cThe unprecedented pace of the drawdown in US crude oil inventories highlights the importance for global markets that the weekend\u2019s efforts to reach a deal between Washington and Tehran bear fruit.\u201d<\/p>\n
\u2014 Garfield Reynolds, Markets Live team leader. For more on the analysis, click here.<\/p>\n
The US and Iran have developed a memorandum of understanding framework that extends the ceasefire 60 days as the two sides reach a final deal to permanently end the war, the Washington Post reported. In the mean time, the Strait of Hormuz will be de-mined and reopened, the report said.<\/p>\n
\u201cI think markets are cautiously optimistic on updates on the Middle East, hence a bit of risk-on,\u201d said Nick Twidale, chief market analyst at AT Global Markets. \u201cTrump has already jumped from \u2018deal imminent\u2019 to \u2018I\u2019m in no rush\u2019 this weekend. So I think it\u2019s 50\/50 again on this deal, although obviously a positive that they are negotiating.\u201d<\/p>\n
Traders remain focused on inflation. They have fully priced in a Federal Reserve rate hike by year-end, underscoring expectations that the US central bank chair Kevin Warsh will need to act swiftly. Later this week, US Personal Consumption Expenditures data and inflation readings across Europe will offer clues on price pressures and the direction of interest rates.<\/p>\n
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Warsh, who has promised the biggest shakeup in decades at the US central bank, was sworn into office Friday. Trump stressed that he wants Warsh to independently lead the Fed, as he looked to downplay investor concern that he would pressure the new central bank chief on policy decisions.<\/p>\n
Elsewhere, China launched an unprecedented campaign against illegal cross-border trading to stem capital outflows, threatening severe penalties against popular brokers and ordering non-compliant accounts to be liquidated within two years.<\/p>\n
Meanwhile, Monday\u2019s drop in oil came as signs emerged that ships are beginning to transit the Strait. Thirty-three vessels, including oil tankers, container ships and other commercial craft, the Strait of Hormuz over 24 hours after obtaining authorization from the Islamic Revolutionary Guard Corps Navy.<\/p>\n
\u201cWhile any reopening of Hormuz would be positive for global oil flows, the fluid nature of the negotiations and the unresolved differences suggest oil price volatility could persist for some time yet,\u201d ANZ Bank strategists including David Croy wrote in a note to clients.<\/p>\n
Some of the main moves in markets:<\/p>\n
Stocks<\/p>\n
S&P 500 futures rose 0.9% as of 1:55 p.m. Tokyo time
\nJapan\u2019s Topix rose 1.2%
\nAustralia\u2019s S&P\/ASX 200 rose 0.5%
\nThe Shanghai Composite rose 0.6%
\nEuro Stoxx 50 futures rose 1.1%<\/p>\n
Currencies<\/p>\n
The Bloomberg Dollar Spot Index fell 0.3%
\nThe euro rose 0.3% to $1.1643
\nThe Japanese yen rose 0.2% to 158.86 per dollar
\nThe offshore yuan rose 0.3% to 6.7809 per dollar<\/p>\n
Cryptocurrencies<\/p>\n
Bitcoin rose 0.9% to $77 286.1
\nEther rose 0.6% to $2 102.86<\/p>\n
Bonds<\/p>\n
Japan\u2019s 10-year yield declined six basis points to 2.700%
\nAustralia\u2019s 10-year yield declined five basis points to 4.88%<\/p>\n
Commodities<\/p>\n
West Texas Intermediate crude fell 5.9% to $90.89 a barrel
\nSpot gold rose 1.2% to $4 564.90 an ounce<\/p>\n
This story was produced with the assistance of Bloomberg Automation.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Stocks #record #high #crude #oil #drops #Iran #Markets #wrap<\/p>\n","protected":false},"excerpt":{"rendered":"
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