As the US-Iran Deal Gets Closer, Stocks Continue To Rise – Europe Market Wrap

Global equities pushed higher while oil fell to multi-month lows as signs continued to build that the US and Iran are close to reaching a provisional agreement to end the war. S&P 500 futures rose 0.4% after the benchmark gained 1.8% in the previous session, while European and Asian markets extended the risk-on move.

Brent crude dropped 3.3%, putting it on track for its first close below $88 a barrel since the opening week of the conflict. The decline reflects a rapid unwinding of geopolitical risk premiums as investors increasingly price in a diplomatic resolution and the reopening of the Strait of Hormuz.

Momentum behind a deal strengthened after reports that an agreement could be signed as soon as Sunday. Iranian officials said a framework text was close to completion, while reports indicated the draft includes 14 provisions covering the reopening of Hormuz and a 60-day negotiation period on nuclear issues.

The rally spread across global equity markets. Europe’s Stoxx 600 climbed 1.5%, while an Asian equity gauge advanced 2.8%, led by another strong gain in South Korea’s Kospi as AI-related shares continued to outperform. Wall Street’s latest advance was once again driven by semiconductor stocks.

Fixed-income markets remained firm following Thursday’s rally. Treasuries held steady, while UK gilts outperformed as yields declined across Europe amid easing inflation concerns linked to lower energy prices.

Elsewhere, the Dollar stabilized after four consecutive sessions of losses. Gold traded little changed, while Bitcoin posted modest gains. In private markets, shadow trading indicated investors were pricing a potential gain of at least 35% for the highly anticipated debut of SpaceX.