Robert Brand
4 min read
(Bloomberg) — Global stocks rose to record highs as crude oil fell after officials signaled the US was nearing a deal with Iran to reopen the Strait of Hormuz and restore oil flows. The dollar weakened.
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Futures contracts on the S&P 500 climbed 1%, while those on the Nasdaq 100 were up 1.4%. US cash markets are shut Monday for the Memorial Day holiday. The dollar retreated against all of its Group-of-10 peers.
The MSCI All Country World Index, the broadest measure of global equities, rose 0.5% to an all-time high closing level. Europe’s benchmark Stoxx 600 gained for a sixth straight session to close at the highest level since the outbreak of the Iran war. Trading volumes were light, with a number of markets including the UK, Switzerland, Norway and Denmark closed for holidays.
WTI crude dropped more than 6% to around $90 a barrel amid optimism a deal will help restore the flow of oil through the vital Middle East artery. US President Donald Trump said Monday negotiations with Iran were “proceeding nicely.” Meanwhile, an Iranian delegation traveled to Doha for consultations with senior Qatari officials on the talks, including discussions on the release of frozen Iranian funds.
The improvement in risk sentiment follows weeks of stalemate between the US and Iran after several previous efforts to strike a deal. Global equities have since surged on optimism that Middle East tensions may ease and on renewed enthusiasm for the artificial intelligence trade, while elevated oil prices and higher inflation pushed bond yields to multi-year highs.
“A clear FOMO factor contributes to unexpectedly strong global risk appetite: investors don’t want to be left out if the Iran war comes to an end while the AI theme continues to lift the stock market,” said Dana Malas, a strategist at SEB.
Italy’s benchmark equity index rose past its all-time closing high set in 2000, with a recent rally in energy and chip stocks supercharging it to record levels. Among individual stock moves in Europe, Delivery Hero SE jumped more than 10% after it received a take-over offer from Uber Technologies Inc. in a deal that would value the German delivery company at about €10 billion ($11.6 billion).
While the US and Iran closed in on a deal, Trump said he won’t “rush” into an agreement. The deal is still a work in progress and the US is going to give diplomacy every chance to succeed, Secretary of State Marco Rubio said.
