Iran peace hopes boost stocks, weaken crude; yen firms after intervention

By Nell Mackenzie and Ankur Banerjee

Mon, August 3, 2026 at 4:43 AM PDT 4 min read

By Nell Mackenzie and Ankur Banerjee

LONDON/SINGAPORE, Aug 3 (Reuters) - Signs that U.S.-Iran tensions were easing again set Wall Street up for a positive start to August, weighing on crude prices and lifting stock futures, while investors prepared for another week packed with earnings and economic data.

Pre-market trading ‌had S&P futures up 0.6% and Nasdaq futures 0.4% higher.

Oil prices fell sharply while European stock markets continued their climb. The yen firmed to a ‌three-month high after the U.S. and Japan confirmed joint intervention to support it.

Brent crude futures sank $4.40, more than 5%, to $83.52 a barrel after U.S. President Donald Trump said talks with Iran would take place on ​Monday. He had earlier called off an attack on Iran to pursue a deal to reopen the Strait of Hormuz. [O/R]

European shares rose 0.4% to start August on a firm note. The German DAX notched an intra-day record and was last up 1.4%.

"For equity markets, the fundamental picture remains encouraging," said Bruno Schneller, managing partner at multi-family office Erlen Capital Management.

"Earnings have generally held up well, and companies with strong pricing power and resilient business models continue to outperform."

Over half of the S&P 500 component companies have reported earnings so far, ‌with 86% of firms beating earnings expectations, research on Monday ⁠from Florian Ielpo, head of macro at Lombard Odier Investment Managers, noted.

Traders also weighed potential consolidation in the healthcare sector, after a report said Bristol Myers Squibb and AstraZeneca had held preliminary merger talks about possibly creating the world's biggest drugmaker, worth nearly $400 billion.

AstraZeneca ⁠shares at one point dipped almost 7% on reports of the potential tie-up.

Asian stocks struggled as the new month began after a turbulent July marked by wild swings as investors fretted over massive capital spending on AI and whether it will provide returns quickly enough.

Japan's Nikkei closed 1% lower, while South Korea's KOSPI slid more than 5%. This weighed on the MSCI's broadest ​index ​of world shares , leaving it flat.

YEN BEARS COWER AFTER JOINT INTERVENTION

The Japanese yen strengthened over 0.5% ​to 156.77 per U.S. dollar after a jump earlier in the ‌day to its strongest since early May at 155.2, putting traders on alert for another bout of intervention.

Japan and the U.S. conducted coordinated yen-buying and will not hesitate to take further action, Japan's Finance Ministry said on Monday, confirming a rare bilateral action to halt the yen's slide to 40-year lows.