Oil Falls $100, Stocks Rise as Gulf Tensions Ease

· Global markets reacted positively after Donald Trump paused U.S. naval operations in the Strait of Hormuz, citing progress toward peace with Iran.

Oil Prices Decline

· Brent crude fell to around $101/barrel

· West Texas Intermediate dropped to about $93/barrel

· Easing fears of supply disruption in a route carrying ~20% of global oil supply

Global Stocks Rally

· S&P 500 futures संकेत ~+0.8%

· Stoxx Europe 600 rose over 2%

· Asia gains:

o KOSPI surged 6%+

o China markets up 1%+

Fuel Prices Still High

· U.S. gasoline average: $4.54/gallon (↑ 5 cents; +53% since war began)

· Diesel: $5.67/gallon (+51% since war began)

· Prices lag crude movements, so relief may take time

Diplomatic Developments

· Wang Yi held talks with Iran in Beijing

· Xi Jinping expected to meet Trump soon

· China’s role as a major buyer of Iranian oil could help stabilize the situation

Market Sentiment

· Investors see signs that a ceasefire may hold, reducing risk of escalation

· Analysts (e.g., Deutsche Bank) say fears of a stagflation shock are easing

· U.S. economic data also suggests limited broader economic damage so far

· Overall: Cooling geopolitical tensions → lower oil prices + stronger equity markets, though consumer fuel costs remain elevated.

[ABS News Service/06.05.2026]

Oil prices tumbled and stock markets rose on Wednesday as turmoil in the Persian Gulf eased after President Trump’s decision to pause the day-old U.S. operation to escort commercial ships through the Strait of Hormuz. He cited what he called “great progress” toward a peace agreement with Iran.

But even as optimism grew for a lasting end to the conflict, average gasoline prices in the United States jumped 5 cents a gallon to their highest levels since the war began, a reminder of the toll the fighting has taken on American consumers.

The president’s decision to halt the operation came as China’s foreign minister, Wang Yi, held talks with Iran’s foreign minister in Beijing on Wednesday, according to China’s official Xinhua news agency. China is a major buyer of Iranian oil and could use its influence to urge Tehran to maintain stability with Washington ahead of a planned summit next week between President Trump and China’s leader, Xi Jinping.

Oil prices slide.

· The price of Brent crude, the global benchmark for oil, was down percent to about $101 a barrel.

· West Texas Intermediate crude, the U.S. benchmark, fell 9 percent to around $93 a barrel.

· Investors and analysts are focused on the continued disruption to shipping in the strait, the narrow waterway between Iran and Oman that is a vital trading route for oil and natural gas that normally carries as much as one-fifth of the world’s oil supply.

Stocks gain.

· Futures on the S&P 500 pointed to a 0.8 percent rise when stocks resume trading in the United States on Wednesday.

· In Europe, stocks gained. The Stoxx 600, a broad index that tracks the region’s largest companies, rose over 2 percent. Stocks in Germany and Britain also jumped.

· Stocks in Asia, where countries import vast quantities of oil and gas, were higher across the board. South Korea’s KOSPI index rose more than 6 percent, while stocks in mainland China rose more than 1 percent.

Gasoline and diesel prices rise.

· Gas prices rose again on Wednesday, jumping to a national average of $4.54 a gallon, according to the AAA motor club. The increase has raised the cost for drivers 53 percent since the war began.

· Gas prices don’t move in lock step with crude, usually trailing increases or drops by a few days.

· The average price of diesel ticked higher to $5.67 a gallon on Wednesday, up 51 percent since the start of the war.

What they are saying: Markets take hope that cease-fire is holding.

· The chief driver of the positive turn in the equity markets on Wednesday has been signals that the cease-fire in the Middle East is still in place, analysts at Deutsche Bank wrote in a research note.

· “This helped oil prices to come back down again and ease fears about a renewed escalation, with investors a bit more hopeful that an extended stagflationary shock would be avoided,” they added.

· Investor optimism was bolstered by the latest economic data in the United States, including job openings, which fell less than expected in March. This has “cemented the case that the conflict’s wider economic impact was still fairly muted” the bank analysts wrote.