Global financial markets experienced significant movements overnight, with oil prices slumping and global stocks surging. Reports indicating a nearing US-Iran memorandum to end the war in the Gulf sparked widespread optimism, following President Trump’s pause of his operation to reopen Gulf shipping. Broader stock indexes were also buoyed by newly upgraded artificial intelligence spending estimates, already lifting Wall Street and global bourses. The MSCI all-country index hit an all-time high on Wednesday, propelled by renewed peace hopes and robust AI demand.
The potential US-Iran deal is reported to include both sides unblocking the Strait of Hormuz, with the US awaiting Iranian responses on key points within 48 hours. Brent crude continued its slide, trading as low as $100 per barrel. In Asia, South Korea’s KOSPI index surpassed 7,000 for the first time, driven by a semiconductor rally that saw Samsung Electronics surge 12% to join the trillion-dollar stock club. US stocks also hit fresh records on Tuesday, with Intel jumping 13% on reports of talks with Apple for processor production, and AMD leaping 16% after boosting its demand forecasts. European shares, meanwhile, advanced to a two-week high after the open.
However, long-dated government bonds have come under pressure this week. The US 30-year Treasury yield briefly topped 5% on Tuesday before retreating. UK Gilts also faced headwinds, with long-term British borrowing rates hitting their highest since 1998, ahead of local elections. The yen saw a jump on Wednesday, touching 155 per dollar, on continued speculation about intervention by Tokyo after reports of support last Thursday. The US market anticipates corporate earnings from Disney, Uber, and Apollo, alongside the crucial April employment report, forecast for a 62,000 job gain. First-quarter S&P 500 aggregate earnings growth is now tracking 28% year-over-year, the strongest since 2021.
