Global markets weigh US-Iran talks, AI-driven gains ahead of key US data

Global markets traded cautiously Monday as optimism over a potential agreement between the United States and Iran supported risk appetite, while investors continued to monitor geopolitical developments, oil prices and major economic data due later this week.

Investor sentiment improved last week after reports suggested Washington and Tehran were moving closer to an agreement aimed at extending the current ceasefire and launching negotiations over Iran’s nuclear program.

According to a recent Axios report, American and Iranian negotiators have agreed on a 60-day framework document covering an extension of the ceasefire and the start of talks on Tehran’s nuclear activities, although US President Donald Trump has yet to give final approval.

Under the reported framework, the Strait of Hormuz would be reopened and restrictions on maritime traffic involving Iranian ports would be eased.

However, US Vice President JD Vance said that while both sides are close to reaching an agreement, differences remain regarding future negotiations on Iran’s nuclear program.

At the same time, the first round of bilateral talks on the review of the US-Mexico-Canada Agreement (USMCA) concluded, according to the Office of the US Trade Representative.

Negotiators discussed priority issues including automotive rules of origin, steel and aluminum trade, and economic security.

Meanwhile, the International Energy Agency (IEA), the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO) warned that the Middle East conflict continues to pose risks to the global economy, energy markets and trade flows.

The organizations said that if maritime shipping traffic does not return to normal levels, rapidly declining global oil inventories ahead of peak summer demand in the Northern Hemisphere could create greater risks for fuel security, market stability and economic resilience.

Investors remain caught between optimism over a potential diplomatic breakthrough and concerns that reaching a comprehensive agreement may prove difficult.

Attention is also turning to US nonfarm payrolls data due Friday, which is expected to provide fresh insight into labor market conditions and the impact of artificial intelligence-driven changes across industries.

Brent crude oil rose 1.3% to $92.6 per barrel Monday amid uncertainty over the timing and implementation of a possible reopening of the Strait of Hormuz.

The yield on the US 10-year Treasury note climbed three basis points to 4.47%, reflecting concerns that higher energy prices could sustain inflationary pressures.

The US Dollar Index gained 0.1% to 99, while gold prices declined 0.7% to $1,451 per ounce.

US equities remained supported by hopes that a potential agreement with Iran could help ease regional tensions.

Technology stocks also boosted sentiment after US computer manufacturer Dell Technologies reported strong revenue growth and raised its full-year revenue forecast. The company’s shares surged 33% on May 29.

On May 29, the Dow Jones Industrial Average gained 0.72%, the S&P 500 rose 0.22%, and the Nasdaq Composite advanced 0.21%. US markets started Monday’s session in positive territory.

European markets, meanwhile, showed mixed performance amid ongoing geopolitical developments and fresh economic data.

France’s economy contracted 0.1% quarter-on-quarter in the first quarter.

Germany’s Consumer Price Index fell 0.2% month-on-month in May, contrary to expectations, while annual inflation slowed to 2.6% from 2.9% in April.

Germany’s Finance Ministry also said the six largest economies in the European Union had agreed on a common position to deepen integration and strengthen cooperation in capital markets.

On May 29, Germany’s DAX 40 rose 0.05% and Italy’s FTSE MIB 30 gained 0.42%, while Britain’s FTSE 100 declined 0.16% and France’s CAC 40 fell 0.7%. European markets opened Monday lower.

Positive sentiment from Wall Street carried into Asia.

Reports that Nvidia founder and CEO Jensen Huang will meet leading technology executives in South Korea this week helped drive gains in the country’s stock market, with shares of LG rising nearly 30%.

Chinese equities, however, came under pressure after the country’s manufacturing Purchasing Managers’ Index (PMI) declined to 51.8 in May from 52.2 in April.

South Korea’s Kospi Index surged 4.5% to a record high of 8,874.16 points, while Hong Kong’s Hang Seng Index gained 0.9% and Japan’s Nikkei 225 rose 0.8% to an all-time high of 67,231.28 points. China’s Shanghai Composite Index slipped 0.1%.