Asian shares gain, oil rises as Iran talks stall

Asian shares gained on Monday, while crude oil prices rose and US equity-index futures declined post the US-Iran peace stalks stalling.South Korea’s Kospi index was up 1.4%, while Japan’s Nikkei was up 0.4%. Brent crude increased 2% above $107 a barrel, S&P 500 futures were down 0.2% after the index ended at a record on Friday.

Treasuries edged lower, giving up some of Friday’s gains after the Justice Department dropped its investigation into the Federal Reserve. The yield on the benchmark 10-year rose two basis points to 4.33%. Gold fell 0.7% to about $4.675 an ounce.
The weak start came after efforts to resume talks faltered over the weekend, when President Donald Trump canceled a trip by his envoys and Tehran said it won’t negotiate under threat. While global equities have shed much of their war-related losses and climbed to records, the rally faces a key test this week, with policy decisions due from the Federal Reserve and the European Central Bank, alongside earnings from megacap tech firms.Global equities start the week at or near records, with the S&P 500 up almost 10% since the end of March, putting it on pace for the best monthly advance since late 2020. The closing of the Justice Department’s probe into Fed Chair Jerome Powell cleared a path for Kevin Warsh’s confirmation, boosting bets the central bank could resume cutting interest rates before year-end.

Markets are likely to remain on edge as major central banks, including the Bank of Japan, deliver policy decisions beginning Tuesday. While investors expect key central banks to leave rates unchanged, traders will be alert to signs officials are concerned about inflation risks stemming from the disruption to oil supply caused by the Iran war.

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