Global stock prices surged on Monday following the announcement of a potential agreement to end the Iran conflict and reopen the Strait of Hormuz. This news led to a more than $4 decrease in oil prices per barrel.
Futures for the S&P 500 rose by 1.2%, and the Dow Jones Industrial Average saw a 0.9% increase, indicating a positive start for Wall Street. In early European trading, Germany’s DAX climbed 1.3% to 24,942.12, while the CAC 40 in Paris and Britain’s FTSE 100 also posted gains.
Investors, after several false starts, expressed optimism that the conflict might finally come to an end. U.S. President Donald Trump confirmed the preliminary agreement and approved the lifting of the U.S. naval blockade on Iranian ports.
Iran acknowledged the agreement but indicated that implementation would commence after a scheduled signing in Switzerland, as announced by Pakistan to take place on Friday. Broader discussions, including those on Iran’s nuclear program, are anticipated to continue over the next 60 days.
At the start of trading on Monday, the price of Brent crude oil, the global benchmark, dropped by $4.37 to $82.96 per barrel. Meanwhile, U.S. benchmark crude also decreased by $4.53 to $80.35 per barrel.
Energy experts cautioned that it might take some time for oil prices to stabilize following the disruptions caused by the conflict. They emphasized the importance of ensuring that the pact holds to guarantee the smooth flow of oil and gas supplies worldwide.
While the reopening of the Strait of Hormuz was seen as a positive development, analysts highlighted the need for continued vigilance and compliance to maintain stability in the market. Despite this, the news brought significant relief to the markets that have been turbulent since the conflict’s onset.
Asian markets responded positively, with Tokyo’s Nikkei 225 surging by five percent to 69,317.50, setting another record high. Technology shares, especially those related to artificial intelligence, attracted the most buying interest, contributing to Japan’s substantial market gains over the past year.
In Seoul, the Kospi index jumped by 5.2%, while the Hang Seng in Hong Kong and the Shanghai Composite index also saw gains. Australia’s S&P/ASX 200, Taiwan’s Taiex, and India’s Sensex also recorded increases.
Amid these developments, the U.S. dollar slightly declined against the Japanese yen, while the euro strengthened against the dollar.
Overall, the positive news regarding the potential resolution of the Iran conflict and the reopening of the Strait of Hormuz had a significant impact on global markets, driving stock prices up and oil prices down on Monday.