Asian markets and U.S. stock futures moved higher after signs of easing tension between the United States and Iran helped calm investors. The advance came as both sides continued to refrain from further attacks, giving diplomacy more room and reducing immediate fears of a broader disruption.
A key driver for markets was fresh discussion around the Strait of Hormuz, a vital route for global energy shipments. Reports that Iran and Oman were discussing vessel transit, including the possibility of fewer restrictions on shipping, added to hopes that traffic through the waterway could normalize. That outlook weighed heavily on oil prices, which fell as supply concerns eased.
The drop in crude supported broader risk appetite, helping lift South Korea's Kospi index and U.S. equity futures. Lower oil prices can ease pressure on inflation and business costs, so traders appeared to welcome the prospect of a less stressed energy market while diplomatic contacts continued.
Even with the market rally, attention remained on the upcoming Federal Reserve meeting. Investors were balancing the relief from lower oil and reduced geopolitical strain against the central bank's policy outlook, making the Fed the next major test for sentiment on Wall Street.
