Tokyo stocks hit record, oil and dollar ease on Middle East peace hopes

By Nell Mackenzie and Ankur Banerjee

LONDON/SINGAPORE, May 25 (Reuters) - Stocks surged connected Monday, portion the U.S. dollar and lipid prices slid arsenic the imaginable of a woody to extremity the Iran warfare buoyed hazard appetite, though a deficiency of clarity implicit erstwhile the Strait of Hormuz would unfastened kept enthusiasm ‌in check.

The astir three-month-long struggle successful the Middle East has driven vigor prices sharply higher and reshaped the planetary rates outlook, arsenic ostentation concerns intensify pursuing ‌Tehran's effectual shutdown of the cardinal strait.

U.S. President Donald Trump said connected Sunday helium had told his representatives not to unreserved into immoderate woody with Iran and his medication played down hopes of an imminent breakthrough.

Just a ​day earlier, Trump said Washington and Iran had "largely negotiated" a memorandum of knowing connected a woody that would reopen the waterway, which carried one-fifth of planetary lipid and liquefied earthy state shipments earlier the war.

Chris Weston, caput of probe astatine Pepperstone, said markets person go little focused connected the timing of a solution and alternatively been keeping an oculus connected the code of the headlines.

"The code has been consistently towards immoderate benignant of resolution... We've go precise diligent for a solution deadline," helium said.

The pan-European STOXX 600 was up 0.7% astatine 629.24, portion Nasdaq futures ‌were 1.4% higher and S&P futures were up 1%. Liquidity is ⁠likely to beryllium thin, arsenic respective markets, including Britain and the United States, are closed connected Monday.

Stocks did not look to wobble, contempt comments from Iran's overseas ministry spokesperson connected Monday saying that portion galore topics had been agreed, this did not mean Tehran is adjacent ⁠to signing a bid deal.

OIL PRICE SETS THE TONE FOR MARKETS

For overmuch of the year, lipid prices person steered broader markets, arsenic investors sift often conflicting signals from Washington and Tehran, with some sides locked successful talks since a fragile ceasefire took clasp successful April.

On Monday, lipid prices deed two-week lows, with Brent crude futures down $4.81, oregon astir 5%, to $98.73 a barrel, portion U.S. West Texas Intermediate ​was ​at $91.79 a barrel, besides down astir 5%. [O/R]

Analysts expect lipid prices to enactment elevated adjacent if determination is ​a solution successful the adjacent term, and they are improbable to instrumentality ‌to levels earlier the warfare arsenic it volition instrumentality clip to remedy proviso concatenation disruption from the conflict.

Last week, Barclays maintained its 2026 mean Brent crude lipid terms forecast astatine $100, though it said risks are skewing higher.

The euro was up 0.3% astatine $1.1634, portion the Japanese yen firmed to 158.96 per U.S. dollar arsenic the safe-haven dollar gave up immoderate of its caller gains. [FRX/]