Asian Stocks Surge and Oil Slides on the US-Iran War Deal
A confirmed truce between Washington and Tehran sent Asia-Pacific shares to records and knocked oil lower, handing central banks a sliver of relief days before the Fed decides on rates.
Japan's Nikkei 225 tore to a record on Monday, briefly clearing 69,000 for the first time and closing the morning session at 69,593.64, up 3,573.60 points, or 5.41 percent, from Friday's finish. The trigger was not an earnings beat or a central-bank surprise. It was the end of a war.
Washington and Tehran confirmed over the weekend that they had agreed to halt the US-Israel war on Iran, and markets across the Asia-Pacific repriced the cost of risk in a single session. South Korea's Kospi jumped 5.7 percent. Taiwan's Taiex climbed 2.7 percent. Australia's ASX 200 added about 1.5 percent. Futures tied to the S&P 500 pointed roughly 1 percent higher and Nasdaq futures about 1.6 percent, setting Wall Street up to follow Asia when it opens.
The clearest signal came from the oil pits. Brent crude, the global benchmark, fell more than 4 percent after President Donald Trump said he had authorized the toll-free reopening of the Strait of Hormuz and ordered the US naval blockade of Iranian ports lifted. Ships of the World, start your engines,
Trump wrote on Truth Social. Let the oil flow!
Iran's Supreme National Security Council and Deputy Foreign Minister Kazem Gharibabadi later confirmed the deal had been finalized, with a signing ceremony set for Friday in Switzerland.
Strip away the geopolitics and what moved was the price of a barrel, and everything a barrel touches. Cheaper oil feeds straight into shipping, fuel and food costs, which is why a Middle East truce lands on the desk of every rate-setter from Frankfurt to Washington.
"While markets had already reacted late last week when President Trump indicated that a deal was close, actual confirmation spurred a further rally. The fall in oil prices will provide some relief for central banks around the world who were worried about the inflation outlook."
Khoon Goh, head of Asia research at ANZ, speaking to Al Jazeera
That relief arrives with awkward timing. The US consumer price index ran at 4.2 percent in May, hot enough to keep the Federal Reserve boxed in, and the central bank decides on interest rates this week. A sustained drop in crude would loosen one of the knots in that decision, though one weekend of price action is not a trend, and Brent has whipsawed on every headline out of the region for weeks.
The single biggest winner on the screens told its own story about where the optimism sits. SoftBank, the Japanese technology investor, rose more than 12 percent, leading Asian tech higher as traders bet that a calmer Gulf clears the way back to the artificial-intelligence trade that has powered this market all year.
For households the math is simpler than the index moves suggest. Lower oil means cheaper fuel and, eventually, slower price rises at the till; for anyone with a pension or a workplace retirement plan, it also makes for a quietly better Monday. The risk is symmetry. The same blockade that reopened can close again, and the rally that priced in peace would unwind just as fast. The political deal still has to be signed on Friday, and until the ink is dry, the market is trading on a promise.
