Key Moments
- Brent crude futures fell more than 1% to $92.5 a barrel, while West Texas Intermediate slipped to $87.40.
- Euro Stoxx 50 opened 0.5% higher, with major European indices posting modest gains amid easing oil concerns.
- Wall Street notched fresh records, with the S&P 500 closing at 7,563.63 after a 0.6% rise.
Oil Prices Ease on Tentative US-Iran Ceasefire Understanding
European equities moved higher on Friday as oil prices declined, supported by growing optimism that the United States and Iran will finalize a deal to prolong the existing ceasefire in the conflict by 60 days.
According to a US official, negotiators from Washington and Tehran reached a preliminary understanding on Thursday to extend the ceasefire and convene a fresh round of discussions on Iran’s nuclear program. The official noted that the arrangement was still subject to formal approval by US President Donald Trump, while Iran had yet to confirm the agreement publicly.
Crude prices dropped to a one-month low amid expectations of reduced tensions, though they remained above levels seen before the start of the war, as the Strait of Hormuz has largely stayed closed. Brent crude had been trading near $70 a barrel in late February before the conflict began.
The potential reopening of the Strait of Hormuz remains a key focus for investors. The US official indicated that the tentative accord specifies Iran would be unable to levy tolls on vessels passing through the strait, while the US would gradually scale back its naval blockade of Iranian ports.
“The oil market continues to edge lower amid growing optimism that the US and Iran are moving towards a deal,” ING commodities strategists Warren Patterson and Ewa Manthey wrote on Friday.
They added: “A reopening of the strait would offer some immediate relief to the oil market, with tankers leaving the Persian Gulf. However, the recovery is still uncertain.”
Energy Market Snapshot
By Friday, international benchmark Brent futures had fallen by more than 1% to $92.5 a barrel. West Texas Intermediate for the nearest delivery was at $87.40, a decline of nearly 1.7%.
Analysts cautioned that even if a ceasefire extension is agreed, the normalization of oil supplies is likely to be gradual and will require time to feed through to the market.
| Asset | Price | Move |
|---|---|---|
| Brent crude (futures) | $92.5 per barrel | Down >1% |
| West Texas Intermediate (nearest) | $87.40 per barrel | Down nearly 1.7% |
| Gold | $4,553 per ounce | Up 0.5% |
European Equities Edge Higher Ahead of Key Inflation Data
European stock indices rose modestly on Friday morning, supported by easing oil prices and optimism over a possible conflict de-escalation, in a session also shaped by fresh inflation data from the four largest economies in the euro area. Those figures are expected to be closely monitored by the European Central Bank before its next meeting on 11 June.
Market participants widely anticipate that the ECB will raise interest rates, as inflation has been moving higher and diverging from the central bank’s 2% objective. The acceleration in price pressures is described as being driven primarily by the Iran war and the resulting energy price shock.
The Euro Stoxx 50 opened with a gain of 0.5%. Benchmark indices in London and Frankfurt each advanced by nearly 0.2%. In Paris, the CAC 40 added 0.6%, while Milan’s main index opened 0.4% higher.
Sector and Stock Movers in Europe
Early trading in Europe saw notable advances in several industrial and technology names. Siemens Energy, Infineon Technologies, and Rheinmetall were among the strongest performers, with all three stocks rising in the first part of the session.
In the pharmaceuticals sector, Novo Nordisk drew investor interest after France announced it would become the first European country to reimburse weight-loss medications, including the company’s key products. Shares of the Danish group were up 0.5% on Friday morning.
Asian Markets Rally on Hopes for Conflict Resolution
Equity markets across Asia also benefited from optimism surrounding a potential end to the war, with major indices in Japan and South Korea trading near record levels.
Tokyo’s Nikkei 225 climbed 1.8% to 65,814.96 after data released on Friday showed that Tokyo’s core inflation for May increased more slowly than economists had forecast.
South Korea’s Kospi advanced 2.3% to 8,369.81. In Hong Kong, the Hang Seng index gained 0.4% to 25,098.68, while the Shanghai Composite Index slipped 0.2% to 4,092.22.
Australia’s S&P/ASX 200 added 1% to 8,681.80, and Taiwan’s Taiex rose 2.3%.
| Index | Level | Change |
|---|---|---|
| Nikkei 225 (Tokyo) | 65,814.96 | Up 1.8% |
| Kospi (South Korea) | 8,369.81 | Up 2.3% |
| Hang Seng (Hong Kong) | 25,098.68 | Up 0.4% |
| Shanghai Composite | 4,092.22 | Down 0.2% |
| S&P/ASX 200 (Australia) | 8,681.80 | Up 1% |
| Taiex (Taiwan) | – | Up 2.3% |
Wall Street Extends Record Run
US stocks continued their advance on Thursday, with major benchmarks setting new highs. The S&P 500 rose 0.6% to close at 7,563.63, establishing another all-time record.
The Dow Jones Industrial Average inched up by less than 0.1% to 50,668.97, while the Nasdaq Composite, which is heavily weighted toward technology companies, climbed 0.9% to 26,917.47.
Company-specific earnings news drove sharp moves in US retail names. Shares of discount chain Dollar Tree jumped 17.9% after posting profits that exceeded expectations. Department store operator Kohl’s rallied 20.6% following results that also beat forecasts.
Currencies and Precious Metals
In early trading on Friday, the US dollar strengthened slightly against the Japanese yen, rising to 159.30 yen from 159.24 yen. The euro eased to $1.1646 from $1.1651.
Gold prices moved higher, with the metal trading 0.5% stronger at $4,553 an ounce.
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