Asian Markets Rise on Iran Deal Optimism and Wall Street Rally

Global markets showed optimism this morning following signs of progress in the Iran nuclear issue. The U.S. military announced that the Strait of Hormuz remains open for commercial shipping, shortly after U.S. Treasury Secretary Scott Bessant indicated that a deal with Iran is near. This positive development, combined with strong corporate earnings reports, fueled sharp gains on Wall Street yesterday, with the effect continuing into the Asian trading session today.

In Asia, major indexes climbed, led by South Korea’s Kospi rising 4% and Japan’s Nikkei up 3%, while Hong Kong saw slight declines. U.S. futures also edged higher after Wall Street’s phenomenal close on Monday. The S&P 500 and Dow Jones both hit new record highs, with the S&P 500 up about 1.8% and Nasdaq surging 2.7%, driven by a 29% jump in Palantir shares following strong earnings and raised forecasts. SpaceX reported better-than-expected results as a public company but saw its stock fall in after-hours trading.

Oil prices dipped slightly, with Brent crude down 1.1% to $78 per barrel and WTI near $74. In Israel, the Tel Aviv Stock Exchange is expected to benefit from the global rally despite recent decoupling from Wall Street trends. Bank managers may particularly benefit after the banking regulator circulated a draft directive allowing them to apply U.S. accounting standards, potentially increasing liquidity and boosting bank stocks, which have already risen about 10% in July.

Meanwhile, famed investor Michael Burry, known for predicting the 2008 financial crisis, remains bearish despite the S&P 500’s record highs. He warned that the rally could end in a sharp drop reminiscent of the 1987 crash. Burry continues to hold short positions on companies including Nvidia, Tesla, and Palantir, with all but his Nvidia bet currently profitable. He noted that new highs in the S&P 500 may attract fresh capital even as risks mount.