Quick overview

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Global markets surged on Wednesday as investors reacted to growing optimism around a potential peace agreement between the U.S. and Iran, while oil prices tumbled to their lowest levels in three weeks.

Peace Talks Gain Traction

The White House believes it is close to signing a memorandum aimed at ending hostilities with Tehran, fueling a strong rally across global equities.

Iran confirmed it is reviewing the U.S. response to its 14-point peace proposal. According to state media, Washington delivered a counteroffer via Pakistan, addressing key demands such as a 30-day ceasefire, guarantees against future aggression, the lifting of the naval blockade, the release of frozen assets, and a new framework to manage the Strait of Hormuz.

However, President Donald Trump struck a more cautious tone over the weekend, suggesting he may reject the proposal, arguing that Iran “has not paid a high enough price.”

Meanwhile, Iranian Foreign Minister Abbas Araghchi traveled to Beijing for talks with China’s top diplomat Wang Yi, who reiterated calls for de-escalation and pledged a more active role in restoring stability in the Middle East.

Oil Prices Drop Sharply

Easing geopolitical tensions triggered a sharp decline in crude prices. Brent crude fell 7.5% to $101.5 per barrel—its lowest level in three weeks—while U.S. West Texas Intermediate (WTI) dropped 6.7% to $95.43, briefly slipping below the $100 mark.

Global Markets Cheer

U.S. equities posted solid gains, with the S&P 500 rising 1.14%, the Nasdaq Composite climbing 1.60%, and the Dow Jones Industrial Average advancing 1.05%.

The rally extended globally. In Europe, the Euro Stoxx 50 jumped 2.24%, while Germany’s DAX gained 2.52% and France’s CAC 40 surged 2.94%. The UK’s FTSE 100 also rose 2.15%.

Asian markets followed suit. Hong Kong’s Hang Seng increased 1.22%, Shanghai’s Composite rose 1.17%, South Korea’s Kospi surged 6.45%, and Japan’s Nikkei 225 edged up 0.38%.