Global stocks rally on lower oil prices

photo: collected

Global stock markets rallied on Monday as oil prices fell and investors welcomed positive signals from US-China trade talks, with the Nasdaq hitting a record high, reports AFP.

Wall Street capped the gains, with the Nasdaq rising 2.3 percent to 27,122.09. The S&P 500 gained 1.5 percent to 7,764.70, while the Dow Jones Industrial Average rose 0.7 percent to 52,048.83.

Stocks had come under pressure last week after the US Federal Reserve raised interest rates amid concerns about inflation, including from higher energy costs linked to the US-Israeli war against Iran.

But falling oil prices eased some of those concerns.

"The pressure cooker of worry about inflation is giving off less steam as crude prices have fallen back amid growing hopes that fresh negotiations could lead to a breakthrough in the Iran conflict," said Susannah Streeter, chief investment strategist at Wealth Club.

Brent crude fell 3.4 percent to $100.34 a barrel, while West Texas Intermediate dropped 4.5 percent to $95.78.

Oil prices were also pressured by expectations of a partial recovery in Saudi shipments and hopes for diplomatic progress on the Iran conflict after US President Donald Trump said he was open to meeting Iranian President Masoud Pezeshkian, who is expected in New York for the UN General Assembly.

Florian Ielpo at Lombard Odier said Saudi exports had risen to a little more than four million barrels per day in September from 2.4 million in August, while part of the damaged East-West oil pipeline could reopen quickly.

The decline in oil prices also helped sovereign bond markets, providing some relief to equities, said Patrick O'Hare at Briefing.com.

In Europe, London's FTSE 100 rose 0.8 percent to 10,739.01, Paris's CAC 40 gained 0.9 percent to 8,138.94 and Frankfurt's DAX rose 1.1 percent to 25,575.01.

Asian markets also advanced. Hong Kong's Hang Seng Index gained 1.2 percent to 25,042.71, Shanghai's Composite rose 1.0 percent to 3,949.91 and South Korea's tech-heavy benchmark gained 1.7 percent. Tokyo was closed for a public holiday.

Technology stocks led gains on Wall Street, with chipmaker AMD emerging as the latest artificial intelligence beneficiary to surpass a $1 trillion market valuation.US and Chinese economic officials held closely watched talks on Sunday on trade and artificial intelligence ahead of a Thursday summit between US President Donald Trump and Chinese President Xi Jinping in Washington.

US Treasury Secretary Scott Bessent said the two sides had discussed creating a channel called the "US-China AI dialogue" to share information about the technology and its potential risks.

At the Trump-Xi meeting, "the area with the most potential to move markets is probably any Chinese cooperation on Iran, given recent oil and bond market volatility," said Thomas Mathews of Capital Economics.

Streeter said investors also hoped the trade truce due to expire on November 10 would be extended and that lower tariffs could be negotiated.