Global Stocks Rise and Oil Prices Fall on US-Iran Deal Expectations

Global stock markets rose and crude oil prices fell between May 20 and May 25, 2026, as investors reacted to growing expectations of a peace deal between the United States and Iran. The diplomatic progress, which aims to end the war and reopen the Strait of Hormuz, has fueled hopes for a surge in global oil supply and a corresponding ease in inflationary pressures.

Crude oil experienced a sharp downturn, with West Texas Intermediate (WTI) falling more than 5% late Sunday, May 24, to trade below $92 a barrel. This marked its lowest point since May 7, 2026. Brent crude futures similarly declined, dropping over 4.6% to approximately $98.70 a barrel on Monday, May 25. These movements follow a period since late February where oil prices had shot roughly 70% higher due to the conflict.

Negotiations between the United States and Iran are reportedly in their “final stages” or “nearing completion,” building on a ceasefire agreement reached in April. Investors are closely monitoring the potential for Iran to resume full-scale oil exports, which could fundamentally shift current energy market dynamics.

Global equity markets and Asian gains

The positive sentiment spread across international exchanges on May 25. In Asia, MSCI’s regional equities gauge climbed 1%, while Japan’s Nikkei index jumped 2.8%. US markets showed similar optimism; S&P 500 futures rose 0.7%, continuing a significant run for the underlying gauge, which has climbed for eight straight weeks.

This momentum follows a period where crypto tokens such as Near Protocol and Ondo surged on May 24, reflecting a broader appetite for risk-on assets. In the US, the Dow Jones Industrial Average had already reached all-time highs on May 21, closing up 0.6% that day as the groundwork for the deal became more apparent to traders.

The tech sector also saw targeted gains earlier in the week. On May 20, the Philadelphia Stock Exchange Semiconductor Index rose 4.5%, joined by a 1.7% rise in the Nasdaq 100. These specific movements occurred as investors began pricing in the potential for reduced energy overheads for major industrial and technology firms.

Middle Eastern markets and maritime security

Exchanges in the Middle East reacted strongly on May 24. Qatar’s QE General index rose 3.2%, and Egypt’s EGX 30 climbed 1.5%. These gains suggest local investors are betting on the stability of regional trade routes, particularly the Strait of Hormuz. This is a sharp reversal from earlier in the year when the US Navy was redirecting commercial vessels due to a maritime blockade.

Jordan’s Amman SE AllShare index also rose 2.2% on Sunday, following the trend of regional de-escalation. The possibility of a formal diplomatic solution is being viewed as a stabilizer for maritime commerce, which has faced severe disruptions over the last few months.

Treasury yields and inflation outlook

The bond market has matched the optimism found in equities. Yields on long-dated Treasuries slid from their highest levels since 2007. On May 20, the yield on 10-year Treasuries declined nine basis points to 4.57%, followed by a further decline to 4.56% on May 21.

In Europe, Germany’s 10-year yield declined 10 basis points to 3.10%. These shifts indicate that the market is beginning to anticipate a cooling of energy-driven inflation. Lower oil prices generally reduce the pressure on central banks to maintain aggressive interest rate stances, provided the peace deal successfully transitions from negotiations to a formal agreement.

While the broader market appears reinvigorated, some individual corporate valuations have recently seen volatility. For example, Lincoln International saw a 79% discount following a recent share price move. However, the macro trend remains focused on the US-Iran deal, which investors believe could provide the most significant boost to global market stability since the war began.