By Sophie Kiderlin and Tom Westbrook
(Reuters) - Oil climbed on Monday as stalled U.S.-Iran peace talkspointed
to further disruption in Middle East energy exports, while global
stocks held steady at the start of a busy week of tech earnings reports
and central bank decisions.
Benchmark
Brent crude futures rose almost 3% to touch a more than three-week high
of $108.5 a barrel at one point in the session, stoking inflation
worries and prompting traders to all but price out rate cuts in
developed markets this year.
MSCI's All-World index (.MIWO00000PUS) was a touch higher, while Europe's STOXX 600 (.STOXX) dipped around 0.2%. In Asia, markets in Tokyo (.N225) and Seoul (.KS11) rose to trade around record highs, riding a fresh wave of AI-fuelled optimism, while Wall Street futures fell.
"It
is an incredibly busy week ahead. Not only are we going to have
inevitably another round of geopolitical headlines all over the place,
we've also got five policy decisions across the G10, we've got five of
the 'magnificent 7' (tech giants) reporting, and I think by market cap
it's about 45% of the S&P giving us results this week," said Michael
Brown, senior research strategist at Pepperstone.
While
a ceasefire has frozen most fighting in the war triggered by
U.S.-Israeli strikes on Iran two months ago, markets remain focused on
the shuttered Strait of Hormuz, crossed by barely any ships carrying cargoes of oil and gas.
The outlook for peace talks remains uncertain.
U.S. President Donald Trump said Iran only had to call
if it wanted to negotiate an end to the war. Iran's foreign minister
landed in Russia on Monday to seek support from President Vladimir
Putin.
Goldman
Sachs analysts lifted year-end Brent oil price forecasts to $90 a
barrel from $80, basing the expectation on a June-end return to normal
for Gulf exports.
"Non-linear
price increases are likely if inventories drop to critically low
levels, which we have not seen in the last few decades," they warned
in a note.
RATES AND HYPERSCALERS EARNINGS
3D printed oil barrels and rising stock graph are seen in this illustration taken March 23, 2026. REUTERS/Dado Ruvic
Equity investors tried to look past the oil shock, with renewed
attention on the tech sector and the artificial intelligence trend that
some view as unstoppable.
"AI
is something that people are very optimistic about and very much
considered a winner," said Mike Seidenberg, senior portfolio manager for
Allianz Technology Trust.
"It's the top of the portfolio."
Intel's (INTC.O) forecast
last week for second-quarter revenue exceeding Wall Street expectations
set off the latest round of buying, pushing the total value of the
chipmaker-heavy stock markets in Taiwan and South Korea above that of
Germany.
U.S. tech earnings due in the coming week include reports from 44% of the S&P 500 by market cap.
Capital expenditure plans will be in focus for firms such as Microsoft (MSFT.O), Alphabet (GOOGL.O), Amazon (AMZN.O) and Meta Platforms (META.O), set to report on Wednesday, while Apple (AAPL.O) will report a day later.
Major
central banks are expected to keep policy on hold this week,
including the U.S. Federal Reserve - at what will likely be its last
meeting with Jerome Powell in the chair.
The
European Central Bank and Bank of England are also set to keep policy
unchanged, but their tone and outlook could challenge market pricing for
rate hikes later this year.
The first central bank to meet, however, will be the Bank of Japan, which is expected on Tuesday to keep its short-term policy rate steady at 0.75%.
In
currencies, the dollar was broadly steady on Monday, with the euro at
$1.1746 and the Japanese yen pinned just below the crucial 160 level.
Reporting
by Sophie Kiderlin in London and Tom Westbrook in Singapore;
Additional reporting by Dhara Ranasinghe in London; Editing by Shri
Navaratnam, Thomas Derpinghaus and Gareth Jones
This week on Reuters
