Global Stocks Rebound as Oil Falls on Iran Ceasefire Hopes

TLDR

• Brent crude eased 0.6% to $88.72 after hitting a one-month high.
• Iran received a 10-day ceasefire proposal from mediators.
• Japan’s Nikkei rose 3%, while South Korea’s KOSPI gained 4.5%.
• Nasdaq futures climbed 1.4% as investors awaited AI-linked earnings.
• Trump announced 50% tariffs on about $20 billion of Canadian imports.

Global stocks moved higher on Tuesday as Brent crude eased from a one-month high, with investors watching Middle East mediation efforts and the next test for AI-linked earnings.

Oil Retreat Lifts Global Market Sentiment

Brent crude futures slipped 0.6% to $88.72 per barrel after touching $91.42 in the previous session. The pullback came after Iran received a proposal for a 10-day ceasefire, aimed at opening the path toward a longer settlement.

Markets had been under pressure after renewed attacks between the United States and Iran raised fears of higher energy costs. Yemen’s Iran-aligned Houthis also said they would impose a naval blockade on Saudi Arabia, keeping supply risks in focus.

David Morrison, senior market analyst at Trade Nation, said,

“There are still channels for sort of talks to go on,” though he added that “just quite how successful they will be is another matter.”

The drop in oil helped ease inflation concerns and supported risk assets across regions. Europe’s STOXX 600 rose 0.2%, while Nasdaq futures gained 1.4%, pointing to a stronger Wall Street open.

Asian Stocks Stage Sharp Rebound

Asian markets recovered after several volatile sessions linked to oil prices, inflation fears, and pressure on technology stocks. Japan’s Nikkei rose 3%, while South Korea’s KOSPI climbed 4.5% after a sharp decline in the previous session.

Mainland China’s CSI 300 gained 1.8%, while Hong Kong’s Hang Seng slipped 0.2%. The recovery added hundreds of billions of dollars in market value across the region as traders reacted to lower crude prices.

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Japan’s market saw one of the strongest rebounds, with estimates showing about ¥36 trillion added after the Nikkei recovered from last week’s losses. The rebound followed a steep sell-off that had erased nearly ¥120 trillion from Japanese equities. Asian stock markets added more than $700 billion in value as oil prices retreated on hopes that Iran could accept a proposed 10-day ceasefire.

🚨Massive Reversal in Asian Markets

Over $700 BILLION has been added to Asian stock markets as oil prices retreated on hopes of an Iran ceasefire. pic.twitter.com/DV8Rz8MlcI

— Bull Theory (@BullTheoryio) July 21, 2026

South Korea also recovered strongly after heavy selling hit the KOSPI earlier in the week. The bounce reflected renewed demand for risk assets, although markets remained sensitive to any fresh shift in Middle East tensions.

AI Earnings and Tariffs Stay in Focus

Investors are now watching earnings from major U.S. technology firms, including Alphabet and Intel. The results will test whether the AI trade can keep supporting global markets after a difficult month for tech shares.

July has been weak for global technology stocks as investors question valuations and the speed of returns from AI infrastructure spending. Strong results from Samsung Electronics and TSMC were not enough to fully calm those concerns.

Fred Neumann, chief Asia economist at HSBC, said,

“While demand for AI hardware remains red-hot,” earnings expectations have become harder to meet. He also said, “The economic backdrop is becoming more challenging as well.”

Trade tensions also remained active after President Donald Trump announced 50% tariffs on about $20 billion of Canadian imports. The move came as USMCA talks continued without Canada at the table.

The Canadian dollar and benchmark bonds showed limited reaction, while Toronto stock futures rose 0.3% after Monday’s 12-day low. Morrison said traders may believe the tariff threat will be “watered down” before taking full effect.

Treasury yields remained elevated after U.S.-Iran tensions renewed inflation concerns. The two-year U.S. Treasury yield stood near 4.2%, while traders priced at least one Federal Reserve rate hike this year and a smaller chance of a second.