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Jun 18, 2026 Major2
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Asian Markets Hit Records on U.S.-Iran Peace Deal as Wall Street Retreats

Asian stock markets hit record highs Thursday after the U.S. and Iran signed an initial peace agreement ending their war, with Japan and South Korea reaching new benchmarks. The deal eliminates U.S. sanctions and allows Iran to sell oil freely, supporting market optimism for economic recovery. U.S. markets retreated Wednesday and early Thursday amid Federal Reserve signals of possible 2026 interest rate increases.



Quick Facts
Who
United States government
What
U.S. and Iran signed initial peace agreement ending hostilities
When
Thursday, June 18, 2026
Where
Tokyo
- U.S. and Iran signed initial peace agreement ending hostilities
- 60-day negotiation window established for Iran nuclear program agreement
- U.S.-backed sanctions waived on Iran
- Iran permitted to sell oil freely
- Iran required to dilute highly enriched uranium stockpile
Asian stock markets surged to record highs on Thursday following the signing of an initial U.S.-Iran peace agreement to end hostilities, while U.S. markets declined due to Federal Reserve signals of potential interest rate increases. Japan's Nikkei 225 gained 1.9% to 71,233.35, marking its first break above 70,000 this week, while South Korea's benchmark rose 0.6% to 8,917.31. Taiwan's Taiex jumped 1%, though Hong Kong's Hang Seng fell 1.4% and Shanghai's Composite edged 0.1% higher. Australia's S&P/ASX 200 slipped 0.4%.
The U.S. and Iran signed a permanent end-of-hostilities agreement that initiates a 60-day negotiating period on Iran's nuclear program, requiring Tehran to dilute its stockpile of highly enriched uranium. The deal immediately waives U.S.-backed sanctions, allowing Iran to sell oil freely—described as a major concession from Washington. Market analysts attributed the Asian rally to confidence in economic recovery and stabilized oil prices, with some noting hopes that reopening the Strait of Hormuz would ease global oil supply concerns and relieve inflationary pressure. Neil Newman, head of strategy at Astris Advisory Japan, described the rally as "very broad-based," reflecting expectations for Japanese economic recovery following the war's end.
The contrast with U.S. market weakness reflected investor anxiety over monetary policy. On Wednesday, the S&P 500 fell 1.2% to 7,420.10, the Dow Jones Industrial Average dropped 1% to 51,492.55, and the Nasdaq composite sank 1.3% to 26,021.66 after the Federal Reserve released projections showing nearly half its policymakers foresee at least one interest rate increase in 2026. Fed Chair Kevin Warsh, in his first news conference leading the central bank, declined to forecast the federal funds rate's year-end position but announced changes to Fed communication strategy, including ending hints about future rate direction in Fed statements.
Technology stocks were among the heaviest Wall Street losers, with Microsoft, Amazon, and Nvidia declining 3.8%, 3.5%, and 1.3% respectively. SpaceX, which debuted on the U.S. stock market last week to considerable fanfare, fell 4.9% in its first loss since its public listing. Oil prices moved lower in response to the Iran deal, with Brent crude falling 1.6% to $78.31 per barrel early Thursday. Despite consumer retail revenue growing faster than expected in May, high inflation continues to dampen consumer sentiment about personal finances.
Why This Matters
The market split signals a powerful regional rotation: investors are rewarding assets tied to lower geopolitical risk and cheaper energy while trimming U.S. equities on tighter-policy fears. For readers, the key takeaway is to watch oil-linked sectors, Asia-exposed portfolios, and rate-sensitive U.S. growth stocks, since the deal may ease inflation pressures but could also change central-bank expectations and cross-border capital flows.
Timeline & Sources
Jun 17, 2026
WireFederal Reserve releases interest rate projections; Wall Street markets decline on rate increase expectations
Jun 18, 2026
WireAsian markets surge on U.S.-Iran peace deal; Nikkei 225 breaks through 70,000 for first time this week