Global stock markets showed overall gains on Monday, while oil prices experienced a significant drop. The dip in oil prices followed U.S. President Donald Trump’s announcement of progress in negotiations to end the war with Iran. This development has been well received by markets worldwide.
The French CAC 40 index increased by 1.1% to close at 8,203.32. Meanwhile, the German DAX posted a gain of 1.0%, reaching 25,148.39, and Britain’s FTSE 100 saw a smaller rise of 0.2%, finishing at 10,466.26. U.S. markets were closed due to the Memorial Day holiday.
Asian markets reflected similar optimism. Japan’s Nikkei 225 surged by 2.9%, closing at 65,158.19. Australia’s S&P/ASX 200 increased by 0.4% to reach 8,692.00, while the Shanghai Composite gained nearly 1%, ending at 4,152.57. Trading remained closed in South Korea and Hong Kong due to holidays celebrating Buddha’s birthday.
The positive sentiment across global markets stems from reports that the United States is nearing a deal with Iran. This agreement is expected to end hostilities, reopen the crucial Strait of Hormuz, and require Iran to surrender its enriched uranium stockpile. Details and timelines are still being finalized.
The reopening of the Strait of Hormuz is particularly significant for oil prices. Its previous closure limited oil tanker movement from the Persian Gulf, affecting global oil supplies and prices. Japan, which relies heavily on oil imports primarily via the strait, stands to benefit from its reopening.
Market analyst Stephen Innes commented, “Markets are rapidly transitioning from pricing geopolitical fear toward pricing a potential peace dividend as Hormuz reopening expectations pressure oil and the dollar lower.”
In recent trading, benchmark U.S. crude oil plummeted $4.77, more than 4%, to $91.83 per barrel. Brent crude, the international standard, fell by $4.86 to $98.68 a barrel.
Currency movements showed the U.S. dollar declining to 158.95 Japanese yen from 159.16 yen. The euro appreciated slightly, trading at $1.1644, up from $1.1605.
Recent earnings reports from U.S. companies exceeding expectations have also supported market activity, although inflation concerns persist due to the prolonged conflict.