Written by The Banking Post
Global markets rallied on Friday as hopes of a US-Iran peace deal lifted sentiment, sending stocks to record highs while oil prices tumbled sharply.
Crude prices fell after Iran signalled that the Strait of Hormuz would remain open during a temporary ceasefire. Brent crude dropped 9% to settle at $90.38 a barrel, while US crude plunged 11.45% to $83.85—well below recent peaks near $120, though still above pre-war levels.
The easing supply concerns triggered a broad market rally. Wall Street surged, with the S&P 500 and Nasdaq Composite notching their third straight record closes, while the Dow Jones Industrial Average hit its highest level since February. Smaller stocks also outperformed, buoyed by falling energy costs.
Optimism grew after Iran confirmed safe passage for commercial vessels during the truce, while Donald Trump said a deal to end the conflict could be reached soon. He added that Washington may work with Tehran on sensitive nuclear issues, a key sticking point in negotiations.
Falling oil prices helped ease inflation concerns, pushing investors into government bonds. US Treasury yields dropped, with the 10-year yield hitting its lowest level since mid-March as bond prices rose.
“The move is being driven by lower energy prices,” said a market analyst. “It’s all the good news coming out of the Gulf.”
The shift in sentiment also weighed on the US dollar, which slipped to multi-week lows as demand for safe-haven assets eased.
While energy stocks declined on lower oil prices, airline shares rallied on expectations of reduced fuel costs. Broader markets remained upbeat, though analysts cautioned that uncertainty persists.
“Do we actually get a prolonged ceasefire and a full reopening? It may take time,” one analyst said, noting that markets are reacting quickly to any positive signals.
For now, easing geopolitical tensions and the prospect of stable energy supplies are driving global markets higher, even as risks remain.
