Markets rally on Iran peace talk optimism as oil retreats
Investors priced in a potential de-escalation of the Middle East conflict, driving gains across major indices and lowering energy costs, even as the US and Iran maintained opposing positions on key nuclear and maritime issues.
Global financial markets moved higher on Thursday as investors reacted to signals of progress in peace talks between the United States and Iran regarding the ongoing Middle East conflict. The optimism helped drive down oil prices and lift major US stock indices, although diplomatic friction persisted regarding Tehran’s uranium stockpile and controls over the Strait of Hormuz.
A senior Iranian source indicated to Reuters that while no formal agreement had been reached, the gaps between the two parties had narrowed. US Secretary of State Marco Rubio acknowledged “some good signs” in the negotiations but firmly stated that any toll system in the strait would be unacceptable. US President Donald Trump added that the US would eventually recover Iran’s stockpile of highly enriched uranium.
The conflict, which began on 28 February, has previously sent energy prices soaring and sparked concerns about higher inflation and consumer spending. In response to the shifting sentiment, US crude fell $1.91 to settle at $96.35, while Brent crude declined $2.44 to settle at $102.58. Adam Sarhan, chief executive of 50 Park Investments, noted that oil trading below $100 was a positive development for the market.
US Treasury yields decreased as the day progressed, with the benchmark 10-year note dropping 0.8 basis points to 4.575%. This followed a period where yields had reached their highest level since January 2025 on Tuesday. The dollar index remained flat late in the session at 99.13, having earlier touched a six-week high as traders weighed the likelihood of a near-term deal.
Equity markets posted broad gains, with the Dow Jones Industrial Average rising 0.55% to 50,285.66, the S&P 500 increasing 0.17% to 7,445.72, and the Nasdaq Composite rising 0.09% to 26,293.10. MSCI’s gauge of global stocks rose 0.48% to 1,106.89, while the pan-European STOXX 600 index finished up 0.04%.
In the technology sector, shares of Nvidia ended down 1.8% as investors took profits after the company reported earnings that beat Wall Street expectations and announced an $80 billion share repurchase program. Conversely, IBM shares surged 12.4% following news that the Trump administration would fund a handful of quantum computing companies, including a new IBM venture, in exchange for stakes in the firms.
Market attention also turned to developments in Turkey, where trading on the local stock market was temporarily halted after sharp falls. The iShares MSCI Turkey exchange-traded fund dropped 9.2% after a top court annulled the 2023 congress of the main political opposition party. Meanwhile, SpaceX’s IPO filing provided investors with their first look at the billionaire’s spending on AI as he seeks to transform the rocket maker into a broader AI-led business.
