Posting on Truth Social, President Donald Trump said negotiations with Iran were moving “in an orderly and constructive manner.” He noted that Washington was not under pressure to finalize an agreement quickly, saying the US had time on its side. Trump also clarified that the US naval blockade on Iranian vessels entering the Strait of Hormuz would stay in place until a formal agreement is completed, approved, and signed.

The positive tone around diplomacy boosted investor confidence across Asian markets, helping Japan’s benchmark index climb 3% and cross the landmark 65,000 mark. Trading activity across the region was lighter than usual, with markets in Hong Kong and South Korea closed for public holidays. US stock exchanges were also shut on Monday in observance of Memorial Day.

Oil prices have remained highly volatile since the conflict began three months ago, fueling concerns about global inflation and potential interest rate hikes by major central banks. In the United States, inflation pressures have intensified. Consumer prices rose 3.8% in April, marking the highest inflation reading since May 2023, largely driven by rising energy costs that have strained household spending and weakened consumer confidence.

Bond markets have also reflected growing uncertainty. Last week, the yield on the 30-year US Treasury bond climbed to its highest point since 2007 as investors worried that the Federal Reserve may eventually tighten monetary policy to control inflation. Recent economic data further highlighted pressure on American consumers, especially lower-income households grappling with elevated gasoline prices and the possibility of broader cost increases. Newly appointed Federal Reserve Chair Kevin Warsh, who assumed office on Friday, is expected to adopt a cautious stance and wait for stronger evidence on inflation trends before making any decisions regarding interest rate increases.