Asian stocks reached record highs amid optimism following the signing of a US-Iran memorandum of understanding. The agreement is expected to ease oil flows through the Strait of Hormuz and reduce inflation pressures. Lower energy costs have also tempered concerns over potential interest rate hikes.
The US and Iran signed the memorandum of understanding, signaling a step toward reduced tensions in the Middle East. This development boosted investor confidence, with positive semiconductor news adding further support to markets.
Oil prices headed for a weekly loss as the deal raised hopes for normalized flows through the Strait of Hormuz. Analysts noted that the agreement remains preliminary and terms appear skewed toward Iran.
Risks persist, including potential opposition from Israel and uncertainty over the deal's final status. The four-month disruption in the region has already contributed to higher inflation, shifting some expectations for Federal Reserve policy.
