Oil slides, risk-on sentiment rallies on US-Iran deal

Global markets had been pricing in war aftershocks for three months, but Donald Trump’s tentative deal with Iran unwound those trades over the course of a week. In the days after June 12, oil prices retreated, bond yields fell and tech-heavy stock indices led a global rally.

For Brent crude, spot prices and contracts out to a six-month horizon all compressed. The flatter curve also suggests that markets see the Strait of Hormuz risk premium as structurally lower, not just temporarily reduced.

South Korea’s KOSPI and Japan’s Nikkei, both home to stocks benefiting from the AI trade, are up about 10% from June 12 levels. Benchmark bond yields declined from Indonesia to Europe. The picture was more nuanced in the US, where initial gains by the and S&P 500 were reversed by Kevin Warsh’s hawkish debut press conference as head of the Federal Reserve.

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