Nikkei rises by 4.75% while oil prices cool on mention of U.S.-Iran peace deal

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Rising inflation and headwinds appear to be cooling as oil prices slump after U.S. president Donald Trump announced on Sunday that the U.S. and Iran have agreed on a peace deal that will be signed on Friday this week. 

(Information in this article reflects publicly available reporting as of [date]. Readers should verify current developments independently.)

The update marks an end to months of conflict and a long, drawn-out negotiation process that roiled markets with strong inflation, elevated oil prices, and rising borrowing costs. 

While the U.S. FOMC has yet to meet and take a decision on whether to keep rates steady or hike them, the announcement of a peace deal has already created healthy signs of a recovering global economy. Trading through the week may reflect cautious optimism, as U.S. president Donald Trump has hinted at a possible peace deal many times during the U.S.-Iran conflict. 

According to Bloomberg, the Japanese borrowing rate could increase to 1%, which will be a 20-year high for the country as it typically keeps its interest rate extremely low. 

In the author's view, multiple indicators of healthy growth have presented themselves, such as rising stock indexes across Asia such as Nikkei, HSI, ASX, NIFTY, and the SHANGHAI composite index. 

• ASX 200: 8,914.00 (+1.25%)
• Nikkei: 69,317.50 (+4.99%)
• Nifty 50: 23,956.95 (+1.41%)
• HSI: 24,833.73 (+0.47%)
• Shanghai: 4,080.635 (+1.22%)

Equities in America also reported strong growth as investors anticipate a strong AI rally. AI companies are now tapping every source of finance they can find to fuel growth as much as they can. 

In response to the news, oil prices of Brent, WTI, and Murban have already sunk to $80 levels, according to data from oilprice.com.

• WTI Crude: $80.86 (-4.74%)
• Brent Crude: $83.73 (-4.12%)
• Murban Crude: $83.02 (-4.85%)

Cooling prices indicate inflation could decrease over the coming months, but price increases for consumer staples and fuel have already kicked in, suggesting unwinding of the inflation effect will take some time as markets stabilize. 

Summary

The peace deal comes at a time when the equity market is heating up with a strong AI rally. The pure-play AI companies that have made their debuts (or are working towards it) have yet to demonstrate any consistent earnings over a timeline of 10 to 20 years. These listings are expected to attract significant institutional and market attention.

Research references

• Stock Market Today: Dow, S&P Live Updates for June 15 - Bloomberg
• SpaceX, Open AI, Anthropic IPOs Have Wall Street Bullish on Equities Again - Bloomberg
• US-Iran ‘peace deal’ announced; Trump says Strait of Hormuz reopening | Conflict News | Al Jazeera
• CNBC data

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