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.
Bulgaria has won the Eurovision Song Contest for the first time, taking victory in a final overshadowed by a boycott over Israel’s participation and the war in Gaza.
At least eight people were injured after a driver rammed a car into pedestrians in the northern Italian city of Modena, authorities said on Saturday. Four of the victims were reported to be in serious condition.
U.S. President Donald Trump said Washington could destroy Iran’s infrastructure “in two days,” while Tehran warned the U.S. would face growing economic costs from the conflict. The remarks came as Hezbollah reported new attacks on Israeli forces despite an extended Lebanon ceasefire.
At least eight people have died and 32 others were injured after a freight train collided with a public bus at a railway crossing in Bangkok on Saturday (16 May), triggering a fire that quickly spread through the vehicle.
U.S. President Donald Trump says China's Xi Jinping agreed Iran must reopen the Strait of Hormuz, as Tehran prepares a new shipping mechanism. Tensions over the U.S. blockade and stalled nuclear talks continue to disrupt global oil supplies.
Negotiations between Samsung Electronics and its workforce on Wednesday have broken down, officials said, raising fresh concerns over potential disruption to South Korea’s export-heavy economy.
By the time American shoppers began noticing higher prices on everything from trainers to televisions, the world's two largest economies were already deep in a trade war that left the world wondering how it would end.
The Strait of Hormuz remains a vital maritime chokepoint and serves as the primary artery linking the Persian Gulf to international energy markets. With approximately 20% of global oil and gas shipments transiting this waterway, it is the backbone of energy security for Asia, Europe, and beyond.
China’s exports grew faster than expected in April, as overseas buyers moved quickly to secure supplies amid fears that the conflict involving Iran could drive up global energy and transport costs.
Asian stocks surged to record highs on 7 May as investors priced in growing hopes of a potential Middle East peace deal, while oil prices eased and the U.S. dollar weakened amid shifting global risk sentiment.
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