Stocks surge, oil prices fall on optimism over US-Iran deal

Asian stock markets rallied on Friday while oil prices declined amid growing optimism that the United States and Iran could reach an agreement to end their conflict, easing concerns over disruptions to global energy supplies. In early Asian trading, Brent crude futures dropped 0.9% to nearly $93 per barrel, while US benchmark West Texas Intermediate fell 1.1% to trade below $88 a barrel. Major stock markets across the region posted strong gains, with benchmark indices in Tokyo, Seoul, and Taipei climbing more than 2%. Sydney’s market also advanced by around 1%. Hong Kong shares edged higher at a slower pace, whereas Shanghai’s key index slipped 0.4%. US markets had closed higher on Thursday despite weak economic signals. The Federal Reserve’s preferred inflation measure rose in April to its highest level since 2023, while data also showed weaker-than-expected economic growth in the first quarter. Persistently high inflation, coupled with slowing growth, has reduced expectations for imminent interest rate cuts by the Federal Reserve, despite repeated calls from President Donald Trump for lower borrowing costs to stimulate the economy. The global surge in enthusiasm for AI-related technology has fuelled a powerful market rally, helping chipmakers Micron and SK Hynix surpass the $1 trillion market valuation mark this week. Meanwhile, in Europe, attention has turned to a key meeting of regional leaders scheduled for Friday to address widening trade imbalances with China. European Union commissioners are expected to debate measures aimed at protecting European businesses from what Brussels considers unfair competition posed by Chinese companies.