Global financial markets rallied on Monday as optimism over a potential deal to end the Iran war boosted risk appetite, even as uncertainty over the reopening timeline of the Strait of Hormuz kept investor sentiment cautious, according to a report by Reuters.
Stocks rose sharply across regions while the U.S. dollar and oil prices declined, with traders reacting to signals that negotiations between Washington and Tehran could lead to easing tensions in the Middle East.
Markets were buoyed by reports suggesting a possible framework to reopen the Strait of Hormuz, a key global energy chokepoint that previously carried around one-fifth of global oil and liquefied natural gas shipments before the conflict disrupted flows.
However, sentiment remained tempered by the lack of clarity over the timing of any full reopening, with investors closely tracking political signals from both sides.
U.S. President Donald Trump said on Sunday he had instructed his representatives not to rush into a deal with Iran, while his administration downplayed expectations of an imminent agreement.
Just a day earlier, Trump had indicated that Washington and Tehran had “largely negotiated” a memorandum of understanding aimed at reopening the strategic waterway.
Iran’s foreign ministry, meanwhile, stated that while progress had been made on several issues, this did not necessarily indicate that a peace agreement was close.
Market participants said trading had increasingly shifted away from timing expectations and toward interpreting the tone of diplomatic signals, with analysts noting sustained sensitivity to headline developments.
In equity markets, European and U.S. futures advanced, while Japan’s Nikkei and Taiwan shares hit record highs, reflecting broad risk-on sentiment.
Oil prices extended losses, with Brent crude futures falling about 4.9% to $98.45 a barrel and U.S. West Texas Intermediate also declining around 4.9% to $91.67, hitting multi-week lows.
Analysts said crude prices were likely to remain elevated even in the event of a near-term resolution, citing lingering supply chain disruptions and geopolitical risk premiums.
In currency markets, the euro gained against the dollar while the Japanese yen strengthened, reflecting a partial shift toward safe-haven positioning amid volatile geopolitical signals.
Bond markets also rallied, with euro zone government bond yields falling sharply to multi-week lows, reflecting increased demand for safer assets as investors reassessed global growth and inflation expectations.
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