Asian stock markets surged on Monday, with Japan’s Nikkei 225 index closing above 65,000 for the first time ever, propelled by growing optimism over a potential ceasefire in the Middle East and a sharp drop in crude oil prices. The Nikkei gained 2.87% to finish at 65,158, marking a historic all‑time high and extending a powerful rally driven by strong corporate earnings, a weak yen, and structural reforms. The broader Topix index added 1.29% to end at 3,942.57.
The rally was fueled by President Donald Trump’s remarks that talks with Iran were progressing in an “orderly and constructive manner,” easing fears of a prolonged disruption in the Strait of Hormuz, through which roughly 20% of global oil supplies normally flow. West Texas Intermediate crude for July delivery tumbled 4.71% to $92.06 a barrel, while Brent crude fell 4.42% to $98.96, temporarily sliding more than 5% during the session. Lower energy costs cooled inflation concerns and revived risk appetite, drawing foreign capital back into Japanese equities and lifting other regional benchmarks such as China’s CSI 300, Australia’s ASX 200, and Taiwan’s Taiex, which also hit a record high.
The positive sentiment spilled into European and U.S. futures, with S&P 500 and Nasdaq contracts indicating a higher open. Gold prices rose 1.1% to $4,559.07 per ounce as the dollar weakened, and other precious metals also advanced, reflecting a broader rotation into risk assets. Analysts cautioned that the rally rests on fragile diplomatic progress; any stumbles in peace negotiations could trigger sharp reversals. In a separate development, Kevin Warsh was sworn in as chair of the U.S. Federal Reserve, adding an extra layer of uncertainty about the future path of monetary policy.
