Global financial markets started the week on a stronger note after the United States and Iran agreed to halt hostilities and return to diplomatic talks, easing fears of a wider conflict in the Middle East.
European shares edged higher while U.S. stock futures posted solid gains, as investors welcomed signs of de-escalation following several days of military exchanges between the two countries. The renewed diplomatic effort also helped cool oil prices, which had surged earlier amid concerns over disruptions to global energy supplies.
Brent crude settled around $72 per barrel, marking a sharp monthly decline despite recent geopolitical tensions. Analysts said the drop in oil prices could provide relief for the global economy by reducing inflationary pressure and supporting growth-focused sectors that had struggled in recent months.
Asian markets recovered from earlier losses, with Japan’s Nikkei closing slightly higher while South Korea’s KOSPI finished marginally lower.
Despite easing energy prices, investors continue to expect the U.S. Federal Reserve to raise interest rates later this year as inflation remains elevated. Those expectations have strengthened the U.S. dollar, pushing it close to a one-year high and keeping pressure on Japan’s yen, which remains near levels that previously prompted government intervention.
Gold prices slipped as the stronger dollar reduced demand for the safe-haven metal, leaving bullion on track for its steepest quarterly decline in more than a decade.
Meanwhile, concerns over the technology sector persist after AI-related stocks came under pressure last week. Although Nasdaq futures pointed to a rebound, analysts warned that soaring investment in artificial intelligence could face challenges from rising costs, supply constraints, and the risk of excessive spending, prompting many investors to shift toward more defensive areas of the market.
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