Global markets rally as Iran talks lift risk appetite

Global equities advanced on Tuesday as investors reacted to renewed U.S.-Iran talks that raised hopes of reduced tensions in the Middle East, while attention also shifted toward the start of the corporate earnings season. Officials and market participants pointed to the prospect of de-escalation as a key driver of the day’s risk-on tone, with gains spanning the United States and Europe.

In the United States, Wall Street’s main indexes moved higher, and market breadth improved across the S&P 500. Eight of the index’s 11 major sectors finished in positive territory, led by communication services, according to market data. The move came as investors weighed geopolitics alongside early first-quarter results from major banks.

Bank earnings produced mixed stock reactions. JPMorgan Chase shares fell 0.8% after its results, while Wells Fargo declined 5.7%. Citigroup rose 2.6%, standing out among the large lenders reporting first-quarter numbers as investors parsed performance and outlooks.

European equities also benefited from the improved tone, with regional stocks reaching one-month highs as the possibility of peace talks between the United States and Iran entered the market narrative. The shift in sentiment coincided with a pullback in energy prices, which can influence inflation expectations and risk pricing across global assets.

In commodities, crude oil futures dropped by more than 1% as easing supply concerns followed the renewed diplomatic engagement. Gold prices moved higher at the same time, reflecting continued demand for defensive positioning even as equities strengthened. The combination of lower oil and higher gold underscored a market balancing improved geopolitical expectations with ongoing caution.

In currency and rates markets, the U.S. dollar extended its slide for a seventh straight session, while benchmark U.S. Treasury yields edged lower. The moves aligned with a broader reassessment of geopolitical risk and the outlook for U.S. monetary policy as investors monitored inflation signals and official commentary.

S. Treasury Secretary Scott Bessent said he was confident core inflation could cool despite the Iran conflict and argued for Federal Reserve rate cuts. In contrast, Chicago Federal Reserve President Austan Goolsbee said rate cuts could be pushed back until 2027 if inflation goals are not achieved.

The policy debate comes as two of three March inflation indicators showed core inflation ticking higher, leaving markets to weigh whether easing financial conditions can be justified alongside still-firm underlying price pressures.