JPMorgan turns bullish on stocks as US-Iran deal sparks global rally

JPMorgan Chase ↘2.47%‘s trading desk turned bullish on equities Monday, citing the US-Iran ceasefire framework as a catalyst for broad risk-on sentiment.afr
Strategist Karen Ward said oil could fall to $70 a barrel in coming weeks as the deal unlocks Iranian supply and weakens OPEC cohesion.bloomberg
The memorandum of understanding, set for formal signing June 19 in Switzerland, extends the ceasefire for 60 days while nuclear talks continue.cgtn

JPMorgan Turns Bullish on Stocks After US-Iran Deal

JPMorgan Chase’s trading desk turned bullish on U.S. equities on Monday after the United States and Iran confirmed a framework agreement to end hostilities and reopen the Strait of Hormuz, a development the bank said could trigger a “broad risk-on impulse across equities.”afr

The shift came as global markets rallied sharply. Brent crude fell as much as 5.5% to around $82 a barrel, MSCI Asia shares jumped roughly 3%, and the Kospi surged about 5% — its biggest two-day gain since 2022 — as investors priced in the prospect of lower energy costs and reduced geopolitical risk.youtube

Oil as a Tailwind

Separately, Karen Ward, JPMorgan Asset Management’s chief market strategist for Europe, the Middle East, and Africa, said oil could fall to $70 a barrel in the coming weeks as the deal unlocks frozen Iranian assets and brings additional supply to global markets. Ward argued the potential supply boost could come not only from Iran but also from weaker OPEC cohesion, as Gulf states look to monetize reserves at current prices.gurufocus

Ward said lower oil prices would help restart the broadening equity rotation that was disrupted when the Iran conflict began on February 27, noting the disinflationary effect could also encourage central banks to cut interest rates.itiger

The Deal’s Contours

The memorandum of understanding, mediated by Pakistan and Qatar, extends the ceasefire for 60 days while technical negotiations continue on Iran’s nuclear program. Iran’s Supreme National Security Council confirmed on Monday that the text has been finalized, with a formal signing ceremony set for June 19 in Switzerland. Under the agreement, the U.S. naval blockade is to be lifted and the Strait of Hormuz reopened under Iranian management, restoring a route that previously carried roughly 20% of global oil and liquefied natural gas traffic.axios

The deal marks the most substantial diplomatic breakthrough since the conflict began over 100 days ago, though critical nuclear issues remain unresolved and will be the subject of the 60-day negotiating window.aljazeera