Oil Slides Below $90 as US‑Iran Tensions Ease, Markets Turn Positive

When the news broke that Washington and Tehran had called a temporary halt to their exchange of fire, the markets seemed to exhale. Brent crude, which had been bobbing above the $120 mark earlier in the month, slid sharply – an 8.2% plunge that nudged it to about $89 a barrel.

The dip in oil gave investors a reason to smile. Nasdaq‑100 futures jumped 1.6%, and the S&P 500 futures were up roughly 1%. Shares tied to the global AI build‑out – from semiconductor makers to equipment suppliers – found fresh momentum in pre‑market trading. One standout was Chinese memory‑chip maker CXMT, which erupted onto the Shanghai exchange, briefly soaring more than five‑fold.

Bond markets joined the party. The yield on the U.S. 10‑year Treasury slipped four basis points to 4.64%, and yields across Europe and Asia fell in tandem. The dollar edged lower by a few tenths of a percent, while gold edged higher, cracking $4,100 an ounce.

But the optimism is tempered. The oil retreat came after Brent surged by more than a third just weeks ago, a rally that had stoked fears of tighter monetary policy to tame inflation. Meanwhile, questions linger about the durability of the AI spending spree by tech giants – will the megacap juggernauts keep splurging on chips and data‑centers?

That uncertainty will be front‑and‑center this week. A slate of earnings from the so‑called Magnificent Seven – Amazon, Meta, Microsoft and others – will test whether AI hype can translate into solid profits. And the Federal Reserve is slated to announce its next policy decision on Wednesday, with markets still pricing roughly a one‑in‑three chance of another rate hike.

“I expect a volatile week with the Fed, tech results, and a bunch of European inflation data coming out,” said Andrea Gabellone of KBC Securities. “The Iran situation remains fragile; the president has left all options on the table, so risk will stay in a narrow corridor for now.”

Across the Atlantic, Europe’s Stoxx 600 climbed 0.9%, bolstered by luxury stocks that are eyeing LVMH’s upcoming earnings. The Swiss franc led major‑currency gains against the greenback.

Even with the Magnificent Seven showing mixed early trading, the earnings landscape is still a guessing game. Capital spending is now a bigger bite of cash flow for many AI‑driven firms, making it harder to impress investors.

Data from Bloomberg Intelligence show that about 86% of the 135 S&P 500 companies that have reported so far beat expectations – the strongest beat‑rate since the second quarter of 2021. If the trend continues, it could soften the blow of any single miss.

All told, the brief lull in Middle‑East hostilities gave markets a modest boost, but the week ahead remains packed with catalysts that could swing sentiment either way.