Asian equities led a global market rally Monday after the United States and Iran confirmed a peace deal, with Brent crude falling more than 4% to $83.82 a barrel and U.S. West Texas Intermediate dropping 4.6% to $80.95. South Korea’s Kospi jumped nearly 5% to top 8,500, while Samsung Electronics and SK Hynix each surged around 6%. Japan’s Nikkei 225 extended Friday’s nearly 3% gain, and S&P 500 futures pointed to a strong Wall Street open above 7,480.
The momentum followed the announcement late Sunday that the two nations reached a memorandum of understanding to end their nearly four-month conflict. Pakistan’s Prime Minister Shehbaz Sharif, whose government mediated the talks, said the agreement will be formally signed in Switzerland on June 19. Iran’s deputy foreign minister confirmed the accord, and President Trump declared the Strait of Hormuz would be “permanently toll-free” under the terms.
Brent crude’s decline represented its lowest level since March, compounding losses from late last week after Trump canceled planned strikes on Iran and signaled a deal was imminent. The memorandum covers Iran’s nuclear activities, the reopening of the Strait of Hormuz, and U.S. exemptions on oil sanctions, with a final agreement to be deliberated over 60 days. ING analysts cautioned that if oil flows do not resume by late July, inventory drawdowns and seasonal demand could push prices sharply higher again.
Gold climbed above $4,200 an ounce as lower oil prices eased inflation expectations, while the U.S. dollar weakened as traders priced in reduced urgency for central bank tightening. Despite the euphoria, uncertainties remain. An Israeli airstrike on Beirut’s southern suburbs on Sunday drew criticism from Trump and threatened to complicate the broader Middle East settlement. The deal specifies an end to military operations in Lebanon, a key Tehran demand, and nuclear negotiations are set to begin within 60 days of signing. Whether the diplomatic framework survives the region’s volatile dynamics remains the central question facing markets.
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