Quick overview

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Global markets started the week with strong gains, reaching their highest levels in more than two months as investors embraced risk following signs of progress in negotiations between the United States and Iran.

The improvement in geopolitical sentiment also pushed oil prices lower, boosting confidence across financial markets. Crude prices fell below the $100-per-barrel mark, reaching their lowest level in a month.

The rally was fueled by optimism after comments from Washington suggested that a potential understanding with Tehran could pave the way for a de-escalation of tensions and the full reopening of the strategically important Strait of Hormuz, a key route for a significant share of the world’s oil and liquefied natural gas trade.

However, a final agreement has yet to be reached, and major differences remain regarding Iran’s nuclear program and broader regional security arrangements.

Analysts continue to urge caution. Invezz noted that markets have swung sharply in recent weeks in response to developments in the Middle East, while several strategists warned that there is still no definitive evidence of a lasting resolution to the conflict.

Even so, the impact on energy markets was immediate. Brent crude fell 5%, slipping back below $100 per barrel and retreating from the highs reached during the most intense phase of the crisis. Lower oil prices provided relief for equity investors by easing inflation concerns and reducing the likelihood of more restrictive monetary policies.

Markets Celebrate the Relief Rally

Although U.S. cash markets are closed for the Memorial Day holiday, equity futures point to a strong session ahead. S&P 500 futures rose 0.95%, Nasdaq futures gained 1.4%, and Dow Jones futures advanced 0.89%.

In Europe, the pan-European STOXX Europe 50 climbed 1.8%, moving back toward record highs and recovering losses accumulated during the months of heightened Middle East tensions.

Germany’s DAX gained 1.57%, extending the broader European recovery, while France’s CAC 40 advanced 1.82%, supported by strength in technology and consumer-related stocks. The United Kingdom’s FTSE 100 also traded higher, though more modestly, adding 0.22%.

The strongest gains were concentrated in banks, airlines, and consumer-facing companies—sectors particularly sensitive to energy costs and expectations for economic growth.

European airlines were among the biggest beneficiaries of the decline in oil prices. Companies such as Lufthansa and Air France-KLM posted strong gains on expectations of lower fuel expenses, while banks also moved higher as investors became more optimistic about the economic outlook.