Markets Rally as US-Hosted Israel-Lebanon Talks Temper Oil

Global equity markets advanced after direct talks between Israel and Lebanon began at the US Department of State, and oil prices fell below $100 a barrel amid hopes for safer shipping through the Strait of Hormuz. The Washington sessions are the first direct Israel-Lebanon negotiations since 1993 and are a stated condition for Iran's participation in broader regional discussions.

US officials have pressed for a full reopening of the Strait of Hormuz and for clear authority from Iran’s Islamic Revolutionary Guard Corps to limit extremist interference in the talks. The negotiations opened on Tuesday and are scheduled to continue on Thursday. Market participants are watching for concrete steps that could reduce the geopolitical risk premium in energy markets.

Global equities rose sharply, with US benchmarks outperforming on gains in large-cap technology names. Cryptocurrencies also rose, while the US dollar fell broadly, supporting rallies in other currencies. Metals posted mixed results: copper and silver were among the strongest performers, while other precious metals showed varied price moves. The energy and minerals sector lagged as crude prices dropped.

Oil fell about 6% in the session. West Texas Intermediate briefly traded below $100 and moved under a key $93 support level, while Brent slipped below $100. Traders said continued declines below $100 would help sustain positive sentiment across risk assets after oil had earlier reached two-year highs driven by regional hostilities.

Participants highlighted tanker traffic through the Strait of Hormuz as the central factor for oil markets. Some market participants said if vessels can transit the strait safely and supply routes are rebuilt, crude could decline further over time, with levels near $70 per barrel cited by some as a possible outcome. Conversely, a breakdown in talks would likely revive crude strength, according to those participants.

Corporate earnings added local drivers to market moves as the US earnings season began. Bank reports, including results from major lenders due this week, and large-cap technology and semiconductor equipment releases are expected to influence sector performance. An IMF meeting continues this week and central bank speeches, including remarks by the European Central Bank president, are on the calendar and may affect market volatility.