Summary

Oil prices have eased and stock markets rallied as Donald Trump touted “great progress” towards a “final agreement” with Iran, while momentum in AI-driven trading accelerated. The US president said he would briefly pause his “Project Freedom” operation escorting ships through the strait of Hormuz, which carries about a fifth of the global oil supplies and has been blockaded by Iran since late February, triggering an energy crisis. Trump said he was stopping the efforts for “a short period” so he could finalise a deal with Tehran but added that his blockade of Iranian ports would remain in place. The news sent Brent crude oil – which had jumped as much as 6% earlier this week on the latest attacks in the Middle East – tumbling 2% to $107 a barrel. Last week Brent crude hit $126 a barrel, its highest level since 2022, after Trump said the US blockade of Iranian ports could last for months and peace talks remained stalled. MSCI’s All-Country World Index rose 0.4% to a fresh record alongside similar milestones for its emerging markets benchmark and its broadest index of Asia Pacific shares outside Japan, which jumped 2.8%. The share surge was led by a 6.6% charge for South Korea’s Kospi, which cleared the 7,000 mark for the first time. Stocks on Wall Street hit fresh records on Tuesday as the S&P 500 rose 0.8% and the Nasdaq Composite gained 1%. “There’s a bit of optimism around a US-Iran ‘deal’ at the moment; it’s possible the authorities decided that was a good moment to give the yen an extra nudge,” said Thomas Mathews, the head of markets for Asia Pacific at Capital Economics in Wellington. “That said, it might just be thin holiday-affected trade; best to wait and see how it fares towards the end of the week. “Investors bought and continue to add to positioning in the 2026 winners,” said Chris Weston, the head of research at Pepperstone Group. “There has been some buying in S&P 500 materials stocks, but it’s tech that continues to attract the bulk of flows, notably in Apple and the memory plays.”