Global Markets Rally on US-Iran Deal Hopes

(MENAFN) Global financial markets edged cautiously higher Monday, buoyed by growing optimism that Washington and Tehran may be closing in on a diplomatic breakthrough, even as investors kept a wary eye on escalating geopolitical risks, climbing oil prices, and high-stakes economic data due later in the week.

Iran Deal Framework Lifts Sentiment
Market mood had already begun improving last week after reports emerged suggesting the two sides were making tangible progress toward an agreement to extend the current ceasefire and open formal negotiations over Iran's nuclear program.

A recent media report indicated that American and Iranian negotiators had agreed on a 60-day framework document covering both a ceasefire extension and the launch of nuclear talks, though US President Donald Trump has yet to give the plan his final sign-off. Under the reported terms, the Strait of Hormuz would be reopened and restrictions on maritime traffic linked to Iranian ports would be relaxed.

However, US Vice President JD Vance tempered expectations, acknowledging that while both sides were drawing closer, meaningful differences over the scope of future nuclear negotiations remained unresolved.

USMCA Talks Get Underway
Separately, the first round of bilateral review talks on the US-Mexico-Canada Agreement (USMCA) concluded, the Office of the US Trade Representative confirmed. Negotiators tackled priority areas including automotive rules of origin, steel and aluminum trade, and broader economic security concerns.

Global Institutions Sound the Alarm
The International Energy Agency (IEA), the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO) issued a collective warning that the Middle East conflict continued to cast a long shadow over the global economy, energy markets, and international trade flows. The organizations cautioned that a failure to restore normal maritime shipping volumes — particularly ahead of peak summer fuel demand in the Northern Hemisphere — could rapidly deplete global oil inventories and pose mounting risks to fuel security, market stability, and economic resilience.

Commodities and Fixed Income
Brent crude rose 1.3% to $92.60 per barrel Monday, with uncertainty over the timing and conditions of any potential Strait of Hormuz reopening keeping energy markets on edge. The yield on the US 10-year Treasury note climbed three basis points to 4.47%, reflecting investor concern that elevated energy costs could keep inflationary pressures alive. Gold slipped 0.7% to $1,451 per ounce, while the US Dollar Index edged 0.1% higher to 99.

US Equities
American stocks entered Monday's session on a positive footing, underpinned by hopes that a prospective Iran deal could help stabilize the region. Technology shares provided additional momentum after Dell Technologies reported robust revenue growth and raised its full-year forecast — sending the US computer manufacturer's shares soaring 33% on May 29. On that same session, the Dow Jones Industrial Average gained 0.72%, the S&P 500 rose 0.22%, and the Nasdaq Composite advanced 0.21%.

Investors are now turning their attention to US nonfarm payrolls data due Friday, which is expected to shed fresh light on labor market conditions and the broader economic impact of artificial intelligence-driven industry shifts.

European Markets Mixed
European bourses opened lower Monday, reflecting a cautious mood amid continued geopolitical uncertainty and incoming economic data. France's economy contracted 0.1% quarter-on-quarter in the first quarter. In Germany, the Consumer Price Index fell 0.2% month-on-month in May — defying expectations — as annual inflation eased to 2.6% from 2.9% in April. Germany's Finance Ministry separately disclosed that the six largest economies in the European Union had reached a common position to deepen capital market integration and cooperation.

On May 29, Germany's DAX 40 edged up 0.05% and Italy's FTSE MIB 30 gained 0.42%, while Britain's FTSE 100 slipped 0.16% and France's CAC 40 fell 0.7%.

Asia Surges on Tech Optimism
Positive momentum from Wall Street rippled through Asian markets. Reports that Nvidia founder and CEO Jensen Huang would meet top technology executives in South Korea this week ignited a rally in the country's equity market, with shares of LG surging nearly 30%. South Korea's Kospi Index soared 4.5% to a record high of 8,874.16 points, while Japan's Nikkei 225 climbed 0.8% to an all-time high of 67,231.28 points and Hong Kong's Hang Seng Index gained 0.9%.

Chinese equities bucked the regional trend, coming under mild pressure after the country's manufacturing Purchasing Managers' Index (PMI) slipped to 51.8 in May from 52.2 in April. The Shanghai Composite Index edged down 0.1%.

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