Gotrade News - Oil prices plunged nearly 7% on Monday as US-Iran peace talks in Doha lifted hopes of a Hormuz Strait reopening. Brent crude fell $7.24 to $96.30 a barrel, while WTI dropped $6.30 to $90.88 a barrel.
The decline reflected investor expectations that a 60-day memorandum of understanding could end the three-month conflict. Equity markets rallied to fresh records, and gold climbed as the dollar weakened on shifting geopolitical risk premiums.
Key Takeaways
- Brent crude fell roughly 7% to $96.30 while WTI dropped to $90.88 on Doha talks.
- The S&P 500 logged its longest weekly winning streak since late 2023.
- Spot gold rose 1.34% to $4,570.31 per ounce as the dollar weakened.
Iran's chief negotiator and foreign minister arrived in Doha, Qatar, for direct discussions with US counterparts. The proposed framework would halt hostilities and chart a path toward a final comprehensive agreement.
According to Kompas Money, traders priced in the possibility of crude flows resuming through the critical chokepoint. The Strait of Hormuz handles roughly one-fifth of global oil shipments on a typical day.
Phil Flynn of Price Futures Group captured the prevailing market mood after the news broke. He said there is hope that oil will start moving through the Strait of Hormuz again soon.
Energy-sector heavyweights such as Exxon Mobil (XOM) traded lower alongside the broader crude complex. Refiners and integrated majors face compressed margins if cheaper barrels return to international markets.
Rory Johnston of Commodity Context urged caution despite the optimistic Doha headlines. He noted negotiators have come close to a deal several times but failed on the details.
Wall Street Hits Fresh Records
US equities closed at all-time highs before the Memorial Day holiday paused trading on Monday. The Dow Jones Industrial Average rose 294.04 points, or 0.58%, to 50,579.70.
The S&P 500 advanced 0.37% to 7,473.47, while the Nasdaq Composite added 0.19% to 26,343.97. As reported by Katadata, the S&P 500 gained 0.9% for the week.
That weekly performance marked the index's longest winning streak since late 2023. Broad market exposure via SPDR S&P 500 ETF (SPY) benefited as lower oil eased inflation concerns.
President Donald Trump described the US-Iran negotiations as going well during weekend remarks. He also warned that Washington would resort to offensive military action if the talks ultimately fail to deliver progress.
Adam Parker of Trivariate Research highlighted a constructive earnings backdrop supporting equity valuations. He estimates US corporate earnings will grow 23% this year and another 16% next year.
Gold and Rate Expectations Shift
Per IDX Channel, spot gold rose 1.34% to $4,570.31 per ounce. The yellow metal advanced as the US dollar hovered near a one-week low against major currencies.
Bullion-linked products such as SPDR Gold Shares (GLD) tracked the spot price higher. Investors rotated into gold as a hedge against geopolitical reversal even amid the prevailing peace optimism.
Rate-cut expectations shifted notably according to CME FedWatch positioning data tracked by traders. The probability of a July Federal Reserve rate hike has now climbed to 8.5%, up from 0.9% a month ago.
