Global Stocks Rally As Oil Sinks 7% On Iran Deal Hopes: Stock Market Today

U.S. equity markets are dark Monday for Memorial Day, but global risk assets are roaring.

S&P 500 futures moved sharply higher, European bourses rallied to 4-month peaks and crude plummeted as Washington and Tehran inch toward a deal that could reopen the Strait of Hormuz.

“Negotiations with the Islamic Republic of Iran are proceeding nicely! It will only be a Great Deal for all or, no Deal at all,” President Donald Trump said on Truth Social on Monday morning.

Yet, the optimism is fragile. The Wall Street Journal reported that talks bogged down Monday over language on Iran’s nuclear program and sanctions relief, while other reports indicate that Tehran would only ship out its highly enriched uranium with guarantees from China.

WTI crude – as tracked by the United States Oil Fund (NYSE:USO) – tumbled 7% to roughly $89 a barrel, hitting the lowest levels since May 7, while Brent crashed 6.9% to around $96.37. Both benchmarks are now off 14% from last week’s peaks but still 45% above pre-conflict levels.

Gold futures rose 1.2% to $4,572 an ounce, while contracts on silver soared 3.96% to $78.30 an ounce.

Across U.S. equity futures by midday Monday, gains were broad-based with cyclicals leading. S&P 500 contracts climbed 0.9% to 7,541, while Dow Jones futures rose 0.9% to 51,020.

Nasdaq 100 futures advanced 1% to 29,750. 

U.S. Treasuries are not trading Monday. The 10-year yield closed Friday at 4.56%, down for a third straight session, while the 2-year settled at 4.13% and the 30-year at 5.07%. Rate-hike pricing has softened on the oil drop, though traders remain partially positioned for a 25-basis-point Fed move by year-end after FOMC minutes flagged persistent inflation concern.

The dollar index slipped to near 99, pulling back from six-week highs as the inflation hedge unwound. Bitcoin (CRYPTO: BTC) held above $77,000, up 0.4%

European Equities Hit Pre-Iran War Highs

European equities ripped to four-month highs Monday, with the Euro Stoxx 50 jumping 2.0% to 6,139 and the pan-European STOXX 600 adding 1.1% to 632, both fully reclaiming their pre-Iran war levels on growing optimism that Washington and Tehran are closing in on a deal to reopen Middle East energy flows.

Leadership came from cyclicals and rate-sensitives: Banco Santander S.A. (NYSE:SAN) surged 4.1%, while industrial heavyweights Schneider Electric SE (OTC:SBGSY) and Siemens AG (OTC:SIEGY) climbed 3.1% and 3.0%, respectively.

Overnight, Asian markets pushed the move further. Japan’s Nikkei 225 jumped 2.9% to a fresh record close of 65,158 and the broader Topix added 1.3% to 3,943, as the slide in crude prices fueled bets on cooling inflation and a reopened Strait of Hormuz.

According to CountryETFTracker data, the iShares South Korea ETF (NYSE:EWY) remains the best-performing market thus far this year, up 87.2%, followed by the iShares MSCI Taiwan ETF (NYSE:EWT), up 52.4%.