Global markets surge as US-Iran peace deal sends oil tumbling

Global Markets Surge as US-Iran Peace Deal Sends Oil Below $84

Financial markets around the world rallied sharply on Monday as the confirmed peace deal between the United States and Iran triggered a broad shift into riskier assets, sending oil prices tumbling and equities soaring across Asia and into Western futures markets.

Asian Equities Lead the Charge

South Korea’s Kospi jumped nearly 5% in early Monday trading, topping the 8,500 level as chipmakers Samsung Electronics and SK Hynix each surged around 6%. Japan’s Nikkei 225, which had already gained nearly 3% on Friday on hopes of a deal, extended those gains in early Monday trading. S&P 500 futures pointed to a strong open on Wall Street, with the contract trading above 7,480.tradingeconomics

The rally followed the announcement late Sunday that the U.S. and Iran had reached a memorandum of understanding to end their nearly four-month conflict. Pakistan’s Prime Minister Shehbaz Sharif, whose government mediated the talks, said the agreement would be formally signed in Switzerland on June 19. Iran’s deputy foreign minister confirmed the accord, while President Trump declared that the Strait of Hormuz would be “permanently toll-free” under the terms.aljazeera

Oil Plunges as Hormuz Reopening Looms

Brent crude fell over 4% to $83.82 a barrel in early Asian trading on Monday, its lowest level since March, according to the Straits Times. U.S. West Texas Intermediate dropped 4.6% to $80.95. The declines came atop losses late last week after Trump canceled planned strikes on Iran and signaled a deal was imminent.straitstimes

According to Reuters, the memorandum encompasses Iran’s nuclear activities, the reopening of the Strait of Hormuz, and U.S. exemptions on oil sanctions, with a final agreement to be deliberated over 60 days. Analysts at ING cautioned that if oil flows do not actually resume by late July, inventory drawdowns and seasonal demand could push prices sharply higher again.reuters

Cautious Optimism Ahead

Gold climbed as lower oil prices eased inflation expectations, with the metal trading above $4,200 an ounce. The U.S. dollar weakened as traders priced in reduced urgency for central bank tightening.ycharts

Despite the euphoria, uncertainties remain. An Israeli airstrike on Beirut’s southern suburbs on Sunday drew criticism from Trump and threatened to complicate the broader Middle East settlement. The deal’s text specifies an end to military operations in Lebanon — a key demand from Tehran — and nuclear negotiations are set to begin within 60 days of the signing. Whether the diplomatic framework survives the region’s volatile dynamics remains the central question facing markets in the weeks ahead.nytimes