Public Markets 3 Days

Last updated: May 25, 2026, 5:30 AM ET

Energy Markets Stabilize as Iran Talks Progress

Oil prices retreated below $100 a barrel as optimism over U.S.-Iran peace negotiations bolstered expectations for reopening the Strait of Hormuz, a critical chokepoint for global energy supplies. The dollar fell to a one-week low against major currencies amid easing geopolitical tensions, while European gas prices slid 5% on similar optimism. Gold prices rose on weaker dollar and deal hopes, climbing near $2,340 per ounce as investors positioned for potential inflation relief. A Swiss trader played a key role in facilitating Iraqi oil shipments through Hormuz, highlighting the strategic importance of the waterway as talks progress.

Global Bond Markets Price in Easing Tensions

Global bond yields dropped as risk sentiment improved following positive signals from U.S.-Iran negotiations, with Japanese government bonds extending their rally alongside Treasury gains. The dollar slipped against a basket of currencies, weighing on dollar-denominated assets while emerging-market stocks rose on energy relief. However, Japanese bonds face homegrown downside risks even as oil prices retreated, with a gauge of risk compensation rising fastest in Japan since the Iran conflict began. Strategists warn yields may stay high even if the Iran war ends, as other factors continue pressuring longer-term borrowing costs.

AI Momentum Fuels Market Rally

The AI boom delivered momentum investors' best returns in decades, as world's hottest stocks powered ahead despite Middle East war concerns. The S&P 500 posted an eighth weekly gain fueled by relentless enthusiasm for artificial intelligence-linked trades, notching gains ahead of a long holiday weekend. SpaceX's record IPO is expected to be the largest initial offering ever, with the company completing its mostly successful Starship rocket flight just ahead of the public debut. Tech giants dominate bond markets as companies race to build AI data centers, tapping capital markets at unprecedented pace.

Deal Activity Accelerates Amid Market Confidence

Uber's $11.6 billion takeover approach lifted Delivery Hero shares after the ride-hailing giant emerged as the biggest shareholder following sizable stake purchases. CVC consortium launched a €10.9bn offer for Italian drugmaker Recordati, extending the buyout group's bet on rare diseases. Apollo made a £1.5bn bid for London-listed Bodycote, representing the latest in several efforts by US firms to acquire European assets. Jardines signaled a pivot with a $2.4bn Australian radiology deal, marking Hong Kong-based conglomerate's first acquisition since a strategic overhaul.

Regional Market Movements

China's solar installations fell for a fourth straight month in April, underscoring persistent domestic demand weakness despite the AI-driven global rally. China trading tycoon lost $1.7 billion in one day after Beijing's cross-border stock trading crackdown, while Chinese firms accelerated coal power plant plans despite government efforts to rein in growth. India's rupee strengthened as oil prices dropped on Iran deal hopes, with the Reserve Bank governor noting the currency may be undervalued. Singapore told banks to speed up account openings for wealthy clients as the city-state competes to remain Asia's premier wealth hub.

Emerging Market Volatility

Emerging-market assets rose as oil prices declined on Iran deal prospects, but political risk roiled markets across Latin America and Eastern Europe. India state lenders wilt as yields hit a two-year high, with a Nifty gauge of government-controlled banks falling 6% this month. South Africa's Pick n Pay slumped after delaying a key turnaround target by a year, tempering optimism that had driven the grocer's stock higher. Sri Lanka's rupee is set to recover by year-end as oil prices decline and the central bank raises interest rates, according to BMI.