Stocks Rally With Bonds as Iran Deal Spurs Relief: Markets Wrap

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June 15, 2026 - 06:52

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(Bloomberg) — Global stocks and bonds rallied while oil slumped to a three-month low after the US and Iran reached a deal to reopen the Strait of Hormuz, sparking a relief rally across markets as concerns over energy-supply disruptions eased.MSCI Inc.’s gauge of Asian shares jumped about 3%, while US and European equity futures climbed more than 1.2%. Japan’s Nikkei 225 headed for a record close. The dollar declined against major peers and Bitcoin climbed to its highest level in nearly two weeks. Brent crude fell more than 4% to head toward $83 a barrel.The peace agreement paves the way to end a conflict that has claimed thousands of lives, disrupted the global economy and driven volatility across financial markets since the end of February. A resumption in Middle Eastern oil flows may help unwind the geopolitical premium embedded in crude prices, offering comfort to policymakers battling inflation.“Markets have been waiting for this news for months, and the relief is already showing,” said Josh Gilbert, lead analyst for Asia Pacific and the Middle East at eToro Ltd., a multi-asset investment platform operator. “However, this is still a move of optimism, not certainty. The nerves won’t fully settle until the deal is signed, meaning investors should still err on the side of caution.”The Strait of Hormuz will be “opening” on Friday upon the signing of the deal with Iran, President Trump said in a post on Truth Social. The announcement came first from Pakistani Prime Minister Shehbaz Sharif, and was followed by Trump and Iranian state media. Neither side released the text of the deal but the broad contours had circulated for days.Even as he celebrated the deal, Trump told the New York Times in an interview Sunday that if an agreement isn’t reached with Iran on a nuclear deal, he could restart military attacks on Tehran.Still, investors embraced risk assets on Monday, betting that a reopening of the waterway — a vital conduit for global oil and gas — will likely help ease inflation pressures and reinforce bets for lower interest rates.Markets in emerging Asia, among the hardest hit by the conflict due to their heavy dependence on oil imports, led gains. In the Philippines, the stock benchmark surged over 6%, the most in six years, while Indonesia’s key index was up 5%. Their currencies were the region’s top performers against the dollar.Meanwhile, yields on 10-year Treasuries slid five basis points to 4.43%. They may decline toward the 4.20% level as inflation concerns ease after the interim deal to reopen the Strait of Hormuz, according to broker ACCM.Swaps traders were pricing in about a 60% chance of a quarter-point Federal Reserve interest-rate hike by December, down from about 80% on Friday.The war altered the trajectory of both the US dollar and Treasury yields. The greenback has strengthened since the conflict began, supported by haven demand, America’s status as a net energy exporter and expectations that higher energy costs may prompt the Fed to raise interest rates. Treasury yields also climbed as traders priced in the inflationary risks posed by higher oil prices.Global equity markets, though, largely shrugged off the turmoil. MSCI’s gauge of world stocks has continued to notch record highs throughout the conflict, most recently on June 2, as relentless enthusiasm for artificial intelligence outweighed geopolitical concerns. It rose as much as 0.6% on Monday.Elsewhere in markets, gold climbed nearly 3% while silver jumped about 4%. Base metals also rallied, with copper gaining more than 1% in London.The Bloomberg Dollar Spot Index dropped 0.3%. The cost of insuring Asian investment-grade debt against default slid to the lowest level since the start of the Iran war, a Markit index showed.What Bloomberg Strategists Say…“The dollar is set to weaken this week with crude oil after the US and Iran announced plans to sign a peace accord on Friday. Extended declines for oil will bolster the narrative that inflation may have once more peaked. That sets up equities and bonds to advance as war trades unwind.”— Garfield Reynolds, MLIV Asia Team Leader. Click here for the full analysis.Beyond geopolitics, the next major event risk for markets looms on Wednesday, when the Fed votes on interest rates for the first time under new Chair Kevin Warsh. If there’s a convincing message that the Fed is willing to shift back into inflation-fighting mode, Wall Street will likely be reassured about Warsh’s commitment to maintaining the bank’s political independence.“A hawkish Fed hold should support the dollar, but Warsh risks spoiling the dollar bull party,” Elias Haddad, global head of markets strategy at Brown Brothers Harriman, wrote in a note to clients. Markets will focus on whether Warsh “joins the majority in keeping rates on hold or dissents for a cut, becoming the first Fed Chair in history to be outvoted on policy.”Traders are also awaiting a swath of other central bank decisions this week as the energy-price shock from the Middle East war feeds into consumer prices and crimps growth.In Asia, the Reserve Bank of Australia is expected to keep its policy rate unchanged at the end of its two-day meeting on Tuesday, while the Bank of Japan may hike its rate to 1% — a level last seen in 1995. Bank Indonesia could lift rates again, according to a Bloomberg survey, after an out-of-cycle move last week to support its currency.“The big question is how quickly this oil relief translates into lower inflation and whether that opens the door for central banks to take an easier stance on monetary policy,” said Tim Waterer, chief market analyst at KCM Trade.Corporate Highlights:Shares of China’s AI model maker Zhipu surged after JPMorgan Chase & Co. raised the stock’s price target, while downgrading recommendation on its domestic rival MiniMax. IPOs, secondary offerings and other share sales are poised to add roughly $1.5 trillion of stock to the US equity market over the next two years, even after accounting for buybacks, according to JPMorgan Chase & Co. If realized, it would mark the strongest period of net equity issuance since at least the late 1990s. Banks from Sydney to London are racing to fill the senior role of chief AI officer, a job that barely existed a year ago. Those in the position, however, say it might not be around for long. Australia-listed toll road operator Atlas Arteria Ltd. has recommended shareholders reject a higher bid from IFM Investors, saying the offer is too low and “materially undervalues” the company. StocksS&P 500 futures rose 1.2% as of 1:46 p.m. Tokyo time Japan’s Topix rose 3.2% Australia’s S&P/ASX 200 rose 1.3% Hong Kong’s Hang Seng rose 0.5% The Shanghai Composite rose 0.9% Euro Stoxx 50 futures rose 1.6% CurrenciesThe Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.4% to $1.1611 The Japanese yen rose 0.1% to 160.04 per dollar The offshore yuan was little changed at 6.7571 per dollar CryptocurrenciesBitcoin rose 2.6% to $65,637.48 Ether rose 2.8% to $1,716.48 BondsThe yield on 10-year Treasuries declined five basis points to 4.43% Japan’s 10-year yield declined five basis points to 2.585% Australia’s 10-year yield declined two basis points to 4.79% CommoditiesWest Texas Intermediate crude fell 5.1% to $80.58 a barrel Spot gold rose 2.6% to $4,328.13 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Ruth Carson, Winnie Hsu, Matthew Burgess, Finbarr Flynn, Megawati Wijaya, Jake Lloyd-Smith and Alice French.©2026 Bloomberg L.P.