World stock markets reached record highs on Friday while oil prices headed toward their biggest weekly drop in nearly two months, as investors waited for more details about a possible agreement to reopen the Strait of Hormuz and extend the ceasefire between the United States and Iran.
According to Reuters sources, the United States and Iran have reached an agreement in principle to continue the ceasefire and ease restrictions on shipping through the Strait of Hormuz. However, U.S. President Donald Trump has not yet officially approved the deal, and Iranian state media said negotiations are still not finalized.
Market movements in Asia were relatively calm. S&P 500 futures remained steady after the index closed at another record high on Thursday.
Meanwhile, Brent crude oil futures fell by around 50 cents per barrel to $93.17, putting oil on track for a weekly decline of more than 10%.
The U.S. dollar also moved slightly lower for the week as Treasury yields declined. Still, analysts believe inflation concerns may continue because high fuel prices linked to the Iran conflict are unlikely to disappear quickly even if a deal is reached.
Jason Wong, senior market strategist at BNZ in Wellington, said markets are already acting as if a deal will happen and the Strait of Hormuz will reopen. However, he warned that this does not mean oil prices or bond markets will collapse sharply from current levels.
Global stock markets continued to benefit from strong excitement around artificial intelligence. Chipmaker shares pushed stock indexes in Tokyo and Seoul up around 2% on Friday, adding to weekly gains.
Dell also surged after the company raised its revenue and profit forecasts due to strong demand for AI-focused servers used in data centers. Its shares jumped 39% in after-hours trading.
Damian McIntyre, head of multi-asset solutions at Federated Hermes, said the AI-driven investment boom may still have a long way to run. He added that the company now expects the S&P 500 to reach 8,000 this year and 9,000 next year.
The S&P 500 closed Thursday at a record high of 7,563.63.
In bond markets, the U.S. 10-year Treasury yield stood at 4.45%, down about 14 basis points for the week. Bond yields globally also moved lower.
Investors are also watching inflation data from Europe and GDP figures from Canada later in the day.
Recent U.S. economic data showed consumer spending, income, home sales, and GDP growth came in weaker than expected, while inflation remained elevated but slightly below forecasts.
In Japan, Tokyo inflation stayed below the Bank of Japan’s 2% target for a fourth straight month in May. However, stronger factory activity supported expectations that the central bank could still raise interest rates in June.
The Japanese yen remained under pressure near the important 160-per-dollar level, which previously triggered government intervention. Japan’s finance ministry is expected to release details of its recent currency market operations, with estimates suggesting it spent around 8.6 trillion yen, or about $54 billion, supporting the currency.
The euro traded firmly at $1.1655, while the New Zealand dollar posted one of the strongest weekly gains after the country’s central bank delivered a more hawkish outlook while keeping interest rates unchanged.
