Asian Stocks Rise as Oil Prices Fall on Hopes for US-Iran Talks

Oil Retreat Lifts Asian Markets, but Inflation Remains in Focus

A diplomatic opening around Iran has eased one source of market stress, while US inflation data could quickly reset expectations for interest rates.

Lower crude eases a key inflation concern

Asian markets rose as a retreat in oil prices improved investor sentiment. Brent crude was last down 1% at $91.56 a barrel, its lowest level since early September and well below $100. Prices fell after US President Donald Trump said he would hold off on new military strikes against Iran, encouraging hopes that talks could follow.

South Korea’s KOSPI gained more than 5%, Japan’s Nikkei rose about 3%, and MSCI’s broadest Asia-Pacific share index advanced 1.5%, moving away from a seven-month low reached last week. The recovery followed a sharp US rebound: the S&P 500 climbed 2.35% in its previous session, while the Nasdaq added 2.7%.

Cheaper oil can temper concern that higher energy costs will feed into inflation and complicate central-bank decisions. That matters for equities because expectations of higher interest rates can weigh on valuations and make financing conditions less supportive. But the market’s relief rests partly on hopes, not a confirmed peace agreement. If diplomacy falters, oil could regain a geopolitical risk premium and revive inflation worries.

US inflation data could test the rally

Investors were awaiting US consumer-price data for clues about the Federal Reserve’s next move. Economists polled ahead of the release expected headline prices to rise 0.3% in October and core prices, which exclude food and energy, to increase 0.2%. Those were forecasts, not confirmed readings.

Rate expectations had already shifted after a stronger-than-expected October jobs report. Markets were pricing in an 84% chance of a rate increase next month, up from 74% a week earlier. The two-year US Treasury yield, which typically tracks expectations for Federal Reserve policy, stood 1.4 basis points higher at 4.56%. The dollar was steady in Asian trading.

A hotter inflation reading could reinforce expectations for tighter policy and challenge the equity rebound; a softer one may ease pressure on rate-sensitive assets. The data therefore offers a near-term test of whether falling oil is translating into broader confidence about prices—or merely providing temporary relief.

Technology shares face separate pressures

The broad market bounce does not resolve concerns about technology valuations. Investors are reassessing the cost and durability of the artificial-intelligence trade, with earnings from technology companies due this week expected to offer further evidence. CoreWeave is among the companies in focus, while Anthropic’s prospective IPO has been identified as a potential test of investor appetite for AI businesses.

Nvidia was also in focus after the company said its board was examining whether chief executive Jensen Huang had been targeted in a foreign intelligence operation. Its shares fell 4.2% ahead of earnings due next week. The episode highlights how leadership-related uncertainty can affect sentiment when investors see a company’s success as closely connected to its chief executive. It is a separate risk from the broader debate over AI spending and demand for chips.

Key Highlights

• Asian shares rose as hopes of US-Iran talks pulled Brent crude down 1% to $91.56 a barrel.
• The KOSPI gained more than 5%, the Nikkei rose about 3%, and the Asia-Pacific index advanced 1.5%.
• US inflation figures could influence expectations for a rate increase next month.
• Markets priced in an 84% chance of a rate hike, compared with 74% a week earlier.
• AI investment concerns and Nvidia-specific headlines remain independent sources of volatility.

Investor Note: The rally reflects improved sentiment, not the removal of geopolitical or inflation risks. Investors may want to distinguish a broad market rebound from company-specific technology uncertainty and watch how oil prices and US inflation data shape rate expectations.