As Crude Oil Drops on Iran, Stocks Continue to Rise – Europe Market Wrap

Global markets surged to new highs as crude oil plummeted as authorities said the US was close to reaching an agreement with Iran to reopen the Strait of Hormuz and restore oil flows. The Dollar weakened.

S&P 500 futures contracts rose 0.9%, while Nasdaq 100 futures rose 1.4%. The US cash markets will be closed on Monday in observance of Memorial Day. The Dollar fell versus all of its Group of 10 counterparts.

The MSCI All Country World Index, the broadest measure of global equities, climbed 0.4% to a record closing level. Europe’s Stoxx 600 index rose for the sixth consecutive session, reaching its highest intraday level since the commencement of the Iran war. Trading volumes were minimal, since several markets, notably the UK, Norway, and Denmark, were closed.

Brent crude fell nearly 6% to below $100 per barrel as investors hoped a settlement would help restore oil flow through the critical Middle Eastern artery. Senior US officials indicated on Sunday that the US and Iran were nearing an agreement to reopen the Strait of Hormuz, though final approval from both sides could take several days. Iran claimed a settlement is not imminent.

To halt capital outflows, China started an unprecedented campaign against unlawful cross-border trading, threatening severe penalties against popular brokers and forcing the liquidation of non-compliant accounts within two years.