Stocks around the world climbed to fresh record highs on Wednesday (6 May), while oil prices fell sharply, after reports suggested the United States and Iran were nearing an agreement to end conflict.
Investors also continued to pour into artificial intelligence-related shares, helping to drive gains across global markets.
Brent crude, the international benchmark for oil prices, initially dropped to just below $100 a barrel, its lowest level in two weeks. Brent later settled 7.83% lower at $101.27 a barrel.
U.S. West Texas Intermediate crude also declined by about 7%, ending the session at $95.08.
On Wall Street, strong corporate earnings helped extend a rally in U.S. equities. The Dow Jones Industrial Average rose 1.24%, while the S&P 500 gained 1.46%. The Nasdaq Composite jumped 2%, with both the S&P 500 and Nasdaq reaching fresh highs.
European markets also advanced. The STOXX 600 index extended earlier gains and was last up 2.2%, after rising 0.7% the previous day. MSCI’s All-Country World Index climbed 1.64% to a new record.
Michael Brown, Senior Research Strategist at Pepperstone, said markets appeared to be responding aggressively to hopes of a breakthrough.
“A pretty punchy move on the back of those stories, almost as if the market has shifted into ‘buy everything’ mode,” he said.
Brown added that uncertainty remained over how close the two sides were to reaching an agreement.
“It’s difficult to say how close to a deal we might be. Market participants, though, aren’t going to wait for confirmation of good news and are essentially now front-running a positive outcome.”
The U.S. dollar, which had benefited from safe-haven demand during the conflict, fell 0.3% against a basket of major currencies as investors grew more optimistic about a possible deal.
Japan’s yen strengthened by as much as 1.8% against the dollar in a rapid move that prompted speculation of another round of market intervention.
Government bond yields also moved lower alongside oil prices, as traders reduced expectations for further central bank interest rate increases. The yield on the benchmark 10-year U.S. Treasury note fell 6.4 basis points to 4.352%.
Despite the strong gains in equities, analysts warned that continued volatility in energy and bond markets could still weigh on global economic growth.
Oil prices remain around 35% higher than when the conflict began in late February, while yields on 10-year U.S. Treasuries are roughly 40 basis points higher.
Technology shares linked to artificial intelligence (AI) were among the strongest performers.
In the United States, shares in chipmaker Advanced Micro Devices surged about 18.6% after the company forecast second-quarter revenue above Wall Street expectations, fuelling further enthusiasm for AI-related investments.
Rival Intel also climbed to a record high, while Arm Holdings and Qualcomm posted strong gains.
The rally spread into Asia, where the broadest index of Asia-Pacific shares outside Japan rose 3.2%.
Samsung Electronics jumped 14%, lifting the company’s market value above $1tn and pushing it ahead of Berkshire Hathaway.
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Financial markets experienced a monumental shift as crude valuations tumbled and equity indices surged worldwide.
U.S. chipmaker Nvidia has made history by becoming the first company in the world to reach a market value of 5 trillion dollars, driven by soaring demand for artificial intelligence technologies.
European shares dropped on Friday after President Donald Trump intensified tariff threats against the EU, casting doubt on trade talks and dampening investor confidence.
Japanese stocks saw the largest foreign inflow in four weeks during the week ending 14 June, driven by optimism over U.S.-China trade talks and a weaker yen supporting exporters’ earnings.
U.S. rapper Kanye West, now known as Ye, performed to a crowd of 118,000 people in Istanbul on Saturday night, marking his first concert in Europe in more than a decade, despite being barred from performing in several countries over past antisemitic remarks.
Iranian-made Yassin missiles were spotted mounted on Armenian Air Force fighter aircraft during Armenia's latest military parade on Thursday (28 May), drawing attention from defence observers and regional analysts.
The Philippines remains under a "severe threat" from China despite recent efforts by Washington and Beijing to ease tensions, Philippine Defence Secretary Gilberto Teodoro said on Saturday (30 May).
Russia has recalled its ambassador to Armenia for consultations, citing Yerevan's growing rapprochement with the European Union. The move is seen as the latest sign of deteriorating relations between the longtime allies ahead of Armenia's parliamentary election on 7 June.
Donald Trump said he is “in no hurry” to reach a deal with Iran, insisting the U.S. is slowly getting what it wants. He warned military action remains an option if talks fail. Meanwhile, U.S. forces said they fired a missile at a vessel trying to breach Washington’s blockade of Iran.
The International Labour Organization (ILO) has begun its latest round of negotiations on creating the first binding global standards for platform-based work, covering services such as ride-hailing, food delivery and other app-based work.
European companies are continuing to deepen their presence in China, with nearly seven in ten firms maintaining or expanding their supply chains despite global efforts to diversify, according to a new survey by the EU Chamber of Commerce.
BP has removed its chair, Albert Manifold, with immediate effect, citing concerns over governance and conduct. The company said its board had unanimously decided that Manifold should no longer serve as chair or director.
The dual-class share structure outlined in SpaceX’s initial public offering (IPO) filing, which gives chief executive Elon Musk outsized control, has reignited one of Wall Street’s longest-running debates over corporate governance.
Kevin Warsh will be sworn in as chair of the U.S. Federal Reserve on Friday as policymakers consider higher interest rates to tackle inflation linked to the Trump administration’s Iran policy.
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