Global markets displayed a mixed performance, influenced by expectations of a US-Iran peace agreement and the upcoming Federal Reserve policy decision. Reports suggested the peace deal, which includes the partial lifting of a naval blockade on Iranian vessels, could be signed on Friday in Switzerland. This optimism, driven by the anticipated reopening of the Strait of Hormuz and the resumption of Iranian oil exports, led to Brent crude falling 1.4% to $78.20 a barrel, its lowest since March 3. However, analysts cautioned that oil prices might not return to pre-war levels quickly due to potential transit fees from Iran and time needed to reverse supply disruptions. Gold also saw a modest increase of 0.2% to $2,333.15 an ounce.
Attention was also focused on the Federal Reserve's policy meeting, the first under Chair Kevin Warsh. The Fed was widely expected to keep interest rates unchanged, but investors were seeking clues regarding future policy and potential revisions to growth and inflation forecasts. The yield on the benchmark 10-year US Treasury note was little changed at 4.44%, and the US Dollar Index hovered near 99.5. Technology stocks faced pressure, contributing to mixed closes on Wall Street on Tuesday, with the S&P 500 falling 0.57% and the Nasdaq Composite losing 1.15%, while the Dow Jones Industrial Average rose 0.64% to a record 52,190.29.
Asian markets mirrored Wall Street's mixed sentiment. Japan's Nikkei 225 gained 0.5% and South Korea's Kospi rose 0.7%, while China's Shanghai Composite slipped 0.2% and Hong Kong's Hang Seng fell 0.4%. Japan's exports notably increased by 17% year-on-year in May, its strongest rise since November 2022, fueled by semiconductor demand, and imports grew 12.5%, the fastest pace since January 2025. These movements reflect the balancing act investors are performing between geopolitical optimism and domestic economic concerns.
