GLOBAL MARKETS-Stocks gain and oil slides after Iran peace deal report

Wed, 06th May 2026 15:00

* US is close to memo to end Iran ⁠war - report

* Oil drops around 6%

* Global stocks jump; Dow Jones index up 0.9%

May 6 (Reuters) - Stocks advanced and oil prices dropped on Wednesday after a report that the United States ‌and Iran are closing in on an agreement to end the war in the Gulf, while momentum in AI-driven trades accelerated. Brent crude, the ⁠global benchmark, plunged to just below $100 per barrel, its lowest in ⁠two weeks, given the importance of oil passing through the Strait of Hormuz. Brent was last trading at $103.25, down 6% on the day.

On Wall Street, a humming U.S. corporate profit engine continued to rally U.S. stocks to record highs. The Dow Jones Industrial Average added 0.85%, the S&P 500 rose 0.7%, and the Nasdaq ‌Composite jumped 0.9%. Europe's STOXX 600 index extended its gains and was last up 2.1% after climbing 0.7% a day earlier. MSCI's All-Country World Index climbed 1.24% to a fresh record.

"A pretty punchy move on the back of those stories, almost as if the market has shifted into ‘buy everything’ mode," said Michael Brown, senior research strategist at Pepperstone.

"It’s difficult to say how close to a deal we might be," he said. "Market participants, though, aren’t going to wait for confirmation of good news and ‌are essentially now front-running a positive outcome." The U.S. dollar, which has been a safe haven during the Iran war, dropped 0.4% against its major peers, reflecting investor hopes for ‌a possible deal.

The yen rose by as much as 1.8% against the dollar in a swift move, triggering speculation of another round of intervention. Meanwhile, yields on government bonds fell along with oil prices as traders dialled down their bets on central bank rate hikes. The 10-year U.S. Treasury yield fell 5.4 basis points to 4.36%.

Although stocks have rallied sharply, ructions in energy and bond markets could weigh ‌on global growth. Oil prices are around 35% higher than they were when the conflict began in late February, while 10-year Treasury yields are around 40 bps higher.

AI RALLY BOOSTS GLOBAL STOCKS

The broadest index of Asia-Pacific shares outside Japan jumped 3.2%. Samsung Electronics surged ⁠14%, topping ⁠a $1 trillion market value and overtaking Berkshire Hathaway .

"Due to the capex spend we are ‌seeing from (AI) hyperscalers in the U.S., the earnings growth trajectory for sectors such as semiconductors, tech hardware, industrials and materials in Asia exceeds anything I have seen in a long time," said Rushil Khanna, head of equity investments for Asia at Ostrum, an affiliate of Natixis ‌Investment Managers. In the U.S., shares in chipmaker Advanced Micro Devices jumped around 20% as the company forecast second-quarter revenue above Wall Street expectations, helping drive AI enthusiasm across markets. (Reporting by Lawrence Delevingne in Boston, Harry Robertson in London and Gregor Stuart Hunter in Singapore; Editing by Thomas Derpinghaus, Kirsten Donovan, Joe Bavier and Nick Zieminski)