Global equity markets rallied on Thursday, driven by optimism that the conflict in the Persian Gulf may be nearing a resolution. Tokyo's Nikkei 225 jumped 5.7% to a record intraday high of 62,915.87, as investors welcomed signals from Washington that a breakthrough with Tehran could be imminent. The surge came as trading resumed in Japan after the Golden Week holiday, extending a rally that has seen the index climb roughly 18% over the past three months.
The prospect of reopening the Strait of Hormuz—a chokepoint for roughly a fifth of the world's oil—has buoyed sentiment across Asia and Europe. Hong Kong's Hang Seng Index rose 1.3%, Australia's S&P/ASX 200 added 0.9%, and Taiwan's TAIEX gained 2.1%. South Korea's KOSPI slipped 0.4% as investors locked in profits after a near-7% surge the previous day. European futures pointed to a firm open, with Euro Stoxx 50 contracts edging higher before 7 am CET.
Oil markets remain cautious
Despite the rally in equities, oil prices stayed elevated. Brent crude rose 51 cents to $101.78 a barrel, while US benchmark crude gained 55 cents to $95.63. The previous day, oil had fallen nearly 8% on hopes that shipping through the Strait of Hormuz could soon restart. However, the persistence of prices above $100 underscores lingering market anxiety about energy supplies and geopolitical risks.
The cautious tone was reinforced by a US military strike on an Iranian oil tanker in the Gulf of Oman, as Washington intensified pressure on Tehran to reach a deal. The waterway's effective closure during the conflict has severely disrupted global oil flows, fueling inflation and pushing up prices worldwide. European capitals, heavily dependent on energy imports, have watched developments closely. The French carrier group has moved south of the Suez Canal for a potential Hormuz mission, while the US has paused its naval escort mission as talks progress.
In currency markets, the US dollar edged down to 156.32 Japanese yen from 156.40 yen, while the euro strengthened slightly to $1.1756 from $1.1747. Gold was marginally higher in early European trading, at $4,706.70.
Tech stocks lead the charge
The rally in equities was led by technology shares, particularly those tied to the artificial intelligence boom. On Wall Street on Wednesday, the S&P 500 rose 1.5% to a record high, the Dow Jones Industrial Average gained 1.2%, and the Nasdaq Composite climbed 2%. Advanced Micro Devices jumped 18.6% after beating profit and revenue forecasts, while Super Micro Computer soared 24.5% on stronger-than-expected results. NVIDIA, widely seen as the face of the AI boom, rose 5.7%, making the biggest single contribution to the S&P 500's advance because of its outsized market value.
Outside tech, CVS Health gained 7.6% after raising its full-year outlook, while The Walt Disney Company climbed 7.5% after saying anticipation for Zootopia 2 had boosted interest across its streaming, parks and cruise businesses.
The strong start to the 2026 earnings season has supported markets despite the conflict. European investors are now watching for any signs of a formal agreement between the US and Iran, which could ease energy costs and reduce inflationary pressures across the continent. The European Pulse has previously reported on how the AI boom has lifted European stocks even as oil prices stayed elevated, and on the diplomatic efforts by Trump advisers to press China to use its ties with Iran to reopen the Strait of Hormuz.
For now, the mood remains cautiously optimistic. As one London-based trader put it: "We're not out of the woods yet, but the direction of travel is encouraging."
