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June 1, 2026 - 00:10
4 minutes
(Bloomberg) — Oil climbed as tensions remained elevated in the Middle East, with negotiations over a permanent US-Iran ceasefire showing little sign of a breakthrough.Brent crude rose above $93 a barrel in early Asian trading after closing at its lowest since mid-April on Friday. S&P 500 equity contracts edged lower, while the dollar was slightly higher against major peers.US forces were injured in an Iranian attack on a Kuwaiti airbase over the weekend and Israel stepped up its offensive against the Tehran-backed Hezbollah in Lebanon. Meantime, Washington and Tehran exchanged messages seeking amendments to a draft agreement that would extend the ceasefire and reopen the Strait of Hormuz, though it remained unclear whether negotiations were making meaningful progress.The renewed tensions risk interrupting a rally driven by unbounded enthusiasm for sectors touched by the artificial intelligence trade. Oil prices had also retreated to their April lows, helping fuel a relief rally in global bond markets that had been ravaged by fears of energy-linked inflation.“Negotiations between the US and Iran remain an outstanding concern and a source of potential volatility going forward,” said Kyle Rodda, senior analyst at Capital.com. “The risk is price has been misled by propaganda as the Trump administration sells a looming deal but, to this point, the Iranians remain reticent on the matter.”On Friday, US President Donald Trump posted on social media he was ready to make a “final determination” on a preliminary agreement to extend the ceasefire. Hours later, he left the Situation Room meeting without any decision being made, the New York Times reported.Amendments to the deal continue to be proposed by both sides, though both the US and Iran might ultimately reject the changes and the deal would collapse, the semi-official Tasnim news agency reported Sunday.Meantime, Israel made its broadest incursion into Lebanon in a quarter-century after Hezbollah stepped up attacks in the country’s north, shattering a fragile ceasefire declared after the Tehran-backed group attacked Israel in response to its war on Iran.“There are likely going to be more setbacks, but the market has already priced an agreement in Iran,” Patrik Lang, chief investment strategist at Geneva-based Global Gate Asset Management. “I wouldn’t expect big market moves, except maybe lower oil, once the deal is announced.”Chinese assets will be in focus in early trading after the official gauge of factory activity slowed in May, adding to signs the world’s second biggest economy is faltering from pressures on global demand in input costs from the Iran war.The official manufacturing purchasing managers’ index fell to 50 from 50.3 in April, the National Bureau of Statistics said Sunday. The non-manufacturing measure of activity in construction and services rose more than forecast to 50.1 from 49.4 last month. A reading below 50 indicates contraction.“China’s economic recovery remains uneven” with traditional businesses experiencing headwinds while high-tech sectors charge ahead, Wee Khoon Chong, an Asia-Pacific macro strategist at BNY wrote in a note to clients. Still, the firm retains a positive view over Chinese stocks and the yuan amid resilient domestic confidence and optimism toward the tech sector.Some of the main moves in markets:StocksS&P 500 futures fell 0.1% as of 7:01 a.m. Tokyo time CurrenciesThe euro was little changed at $1.1656 The Japanese yen was little changed at 159.37 per dollar The offshore yuan was little changed at 6.7644 per dollar The Australian dollar fell 0.1% to $0.7177 CryptocurrenciesBitcoin rose 0.2% to $73,818.76 Ether rose 0.3% to $2,010.22 CommoditiesWest Texas Intermediate crude rose 2.4% to $89.47 a barrel Spot gold fell 0.4% to $4,524.05 an ounce This story was produced with the assistance of Bloomberg Automation.©2026 Bloomberg L.P.
