U.S. Treasurys and stock futures climbed in early European trading after President Trump signed a memorandum of understanding in Versailles to end the war with Iran and reopen the Strait of Hormuz. The surprise agreement boosted investor sentiment, with futures rising across major indexes following Japanese and Korean markets hitting fresh highs.

The rebound comes after Kevin Warsh's hawkish debut as Federal Reserve chair raised expectations for a policy rate hike later this year. Investors have pulled back from bets that the Fed would cut rates this year, with markets now pricing in tighter monetary policy. The Bank of England is expected to follow the Fed's lead in keeping rates on hold later.

Brent crude slid 2.3% to $77.71 a barrel while WTI dropped 2.5% to $74.08 as both benchmarks fell roughly 15% this week. The prospect of additional Iranian supply has erased most geopolitical risk premium, though the industry remains cautious about normalization pace.

Despite the price drop, global inventories stay tight, particularly in the U.S. where crude stockpiles fell by 8.3 million barrels last week. Some tankers have already resumed movements, with exporters like Iraq preparing to increase shipments. The market reaction reflects relief that Middle East tensions may ease while supply constraints persist.