U.S.-Iran Tensions Ease, Oil Prices Collapse, Global Stocks and Bonds Rally

Market Overview

Comments from President Donald Trump that U.S.-Iran negotiations had entered the “final stage” triggered a sharp drop in crude oil prices and fueled a broad rally across global equities and bonds. Brent crude plunged more than 7% intraday, while WTI fell 5.6%. Cooling inflation concerns also drove a strong rebound in sovereign bonds, with the U.S. 10-year Treasury yield falling 10 basis points to 4.56%.

U.S. equities staged a strong rebound, led by technology and semiconductor shares. The Nasdaq gained 1.54%, while the Philadelphia Semiconductor Index surged 4.5%. NVIDIA reported better-than-expected Q1 revenue, although softer forward guidance weighed on sentiment, sending the stock down roughly 1.5% in after-hours trading.

U.S.-Iran De-escalation Triggers Sharp Oil Selloff

President Donald Trump stated that U.S.-Iran negotiations were in the “final stage,” accelerating a sharp decline in crude oil prices. Brent crude fell more than 7% intraday, while WTI dropped 5.5%. U.S. crude settled at $98.26 per barrel, while Brent closed at $105.02 per barrel.

Iran said it would continue negotiations despite what it described as “deep distrust” toward Washington. Reports indicated that a new round of talks could take place in Islamabad following the May pilgrimage season.

Meanwhile, U.S. crude inventories posted a record weekly drawdown of 17.8 million barrels, according to data from the U.S. Energy Information Administration, amplifying volatility across energy markets.

Semiconductor Stocks Lead Rally as Chinese AI Chipmakers Surge

The Philadelphia Semiconductor Index jumped 4.5%, while Chinas STAR Market 50 Index climbed more than 3%. Chinese semiconductor names including Cambricon, Hua Hong Semiconductor, and Semiconductor Manufacturing International Corporation posted strong gains, with SMIC rising nearly 10%.

Alibaba Group‘s T-Head division unveiled the Zhenwu M890 AI chip, claiming a threefold performance improvement and integrated 144GB memory capacity, highlighting China’s continued push toward domestic AI computing independence.

Separately, labor tensions at Samsung Electronics temporarily eased after wage negotiations resulted in a 6.2% pay increase. Samsungs semiconductor division will also allocate bonuses equivalent to 10.5% of performance-based compensation, helping reduce near-term supply chain concerns.

Global Bond Markets Rally as Yields Retreat

Global sovereign bond markets rebounded sharply as inflation concerns linked to geopolitical tensions eased. The U.S. 10-year Treasury yield fell 9 basis points to 4.57%, while Germanys 10-year Bund yield dropped 10 basis points to 3.10%.

In the U.K., the 10-year gilt yield declined 14 basis points to 4.99%, driven largely by short-covering activity in long-duration bonds.

Japans ultra-long government bond auction also surprised to the upside, sending yields lower by more than 10 basis points and offering the first signs of relief after several days of turbulence in the Japanese bond market. The stabilization in bond markets helped support broader risk assets globally.

AI IPO Wave Accelerates: SpaceX and OpenAI Move Closer to Public Listings

SpaceX reportedly submitted IPO filing documents, with market estimates placing its valuation near $1.5 trillion. Its satellite internet business, Starlink, has reportedly surpassed 10 million subscribers and generated more than $11 billion in annual revenue.

Meanwhile, OpenAI is expected to file for an IPO as early as this week, targeting a valuation above $1 trillion and aiming for a potential September listing ahead of rival Anthropic.

Anthropic is also expected to post its first profitable quarter, with quarterly revenue projected to double to approximately $10.9 billion, signaling continued explosive growth across the AI sector.

Key Themes AheadNVIDIA After-Hours Reaction

NVIDIA reported Q1 revenue growth of 85% year-over-year, beating market expectations. However, July revenue guidance fell short of the markets highly optimistic forecasts, pushing the stock down around 1.5% in after-hours trading.

The market reaction reinforced the view that the AI bull market now faces increasingly demanding expectations. Future hyperscaler capital expenditures and AI infrastructure orders will likely become the next major test for the sector.

Bond Market Turbulence Pauses, But Structural Risks Remain

Global long-duration bonds rebounded simultaneously, with U.S., German, and U.K. 10-year yields falling between 9 and 14 basis points. Japans ultra-long bond auction also showed unexpected strength.

However, the U.S. 30-year Treasury yield remains near the 5% level, suggesting that structural concerns surrounding inflation and expanding government debt have not disappeared. For now, the rally appears more consistent with short-covering activity rather than a definitive reversal in the broader bond market trend.