Global Markets Rise as Oil Comes Under Pressure

Global financial markets continued to show mixed but notable movements at the end of the week. While world stocks climbed to fresh record highs, oil prices moved toward their steepest weekly decline in nearly two months, as investors grew more optimistic that the United States and Iran could reach an agreement to reopen the Strait of Hormuz and extend their ceasefire.

According to Reuters, sources said the U.S. and Iran had reached an understanding to prolong the ceasefire and ease shipping restrictions, although the deal had not yet been approved by President Donald Trump, and Iranian state media said it had not been finalized.

Oil Prices Fall as Geopolitical Risks Ease

As markets priced in the possibility that the Strait of Hormuz could soon reopen, Brent crude fell to around $92.69 per barrel, putting it on track for a weekly decline of more than 10%. This would mark the sharpest weekly drop in nearly two months.

Even so, analysts cautioned that the market may be reacting too quickly to the positive headlines. According to BNZ, the prospect of a deal mainly removes the risk of a far worse outcome rather than providing enough justification for oil prices to fall significantly further in the near term.

Technology and AI Stocks Continue to Lead the Rally

In contrast to the decline in oil, global equities extended their gains, with the MSCI World Index reaching a new record high. Investor enthusiasm around artificial intelligence remained the main driver supporting the market.

Technology and semiconductor shares rose strongly across major markets, pushing benchmarks in Tokyo and Seoul up about 2%. One of the standout movers was Dell, whose shares surged 39% in after-hours trading after the company raised its revenue outlook, adding further momentum to the AI-driven market rally. In Hong Kong, Lenovo shares also climbed nearly 60% for the week.

Federated Hermes said markets may still be in the middle stage of a longer AI-led investment cycle, and raised its forecast for the S&P 500 to 8,000 this year and 9,000 next year.

Bond Yields and Currencies Move Modestly

In the bond market, the U.S. 10-year Treasury yield fell to around 4.44%, down roughly 15 basis points for the week. The U.S. dollar also edged lower, tracking the decline in Treasury yields.

In currency markets, the Japanese yen remained under pressure and traded near 159.31 per dollar, close to the 160 level that Japanese authorities have repeatedly defended. Meanwhile, the euro held firm at $1.1638, while the New Zealand dollar was among the strongest performers of the week after the Reserve Bank of New Zealand kept interest rates unchanged but delivered a more hawkish outlook than expected.

Economic Data Remains a Key Focus

Beyond geopolitics and AI, investors are also closely watching incoming economic data. Overnight U.S. figures showed that personal consumption spending, income, home sales, and GDP all came in softer than expected, while inflation remained elevated but slightly below forecasts.

In Europe, markets are awaiting preliminary inflation figures, while Canada is set to release GDP data. In Japan, core inflation in Tokyo remained below the 2% target for a fourth consecutive month, though a rebound in manufacturing activity suggested resilience in the economy and supported expectations of a Bank of Japan rate hike in June.

Conclusion

Global markets are now reflecting two major themes at once: easing geopolitical risk, which is pushing oil prices lower, and continued confidence in the AI investment cycle, which is driving equities higher. In the short term, market direction will depend heavily on whether a U.S.-Iran deal is formally completed, as well as on incoming economic data and the interest rate path of major central banks.