LONDON – Global oil prices plunged on Monday after the United States and Iran paused their exchange of attacks, easing fears of disruptions to crude supplies and shipping through the Middle East. International benchmark Brent crude dropped six per cent to about $86.22 per barrel, while U.S. West Texas Intermediate (WTI) fell 6.8 per cent to $83.22 per barrel, reversing last week’s rally that pushed Brent above $100 per barrel following attacks on vessels in the Strait of Hormuz.

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The easing of geopolitical tensions lifted investor confidence across major financial markets. European and Asian stock markets closed higher, with Germany’s DAX gaining one per cent, while London’s FTSE 100, France’s CAC 40, Tokyo’s Nikkei, Hong Kong’s Hang Seng and Shanghai Composite all recorded gains. However, optimism on Wall Street faded during the trading session as technology stocks came under pressure, led by AI chipmaker Nvidia, whose shares fell more than five per cent. Analysts said investors were hopeful the temporary ceasefire could pave the way for renewed diplomatic talks between Washington and Tehran.

Market participants are also turning their attention to a busy week of monetary policy decisions and corporate earnings. The U.S. Federal Reserve is expected to leave interest rates unchanged on Wednesday, with the Bank of England likely to follow suit on Thursday, although policymakers remain cautious over the inflationary risks posed by volatile energy prices.

Investors are equally awaiting earnings reports from technology giants including Microsoft, Apple, Amazon and Meta, while major Asian chipmakers such as Samsung, SK hynix and Kioxia are also due to release their financial results. Meanwhile, China’s memory chipmaker CXMT surged 465 per cent on its Shanghai stock market debut after raising $9.8 billion in one of the country’s largest technology initial public offerings.