TL;DR

Japan's Nikkei 225 hit an intraday record high on Thursday morning as Japanese markets reopened after the Golden Week holiday, catching up to a powerful global risk rally driven by hopes of a US-Iran peace deal. Asian stocks collectively hit an all-time record. Bitcoin climbed to near $82,000, its highest level since January 31, and Ethereum cleared $2,400. Oil prices remained lower after Wednesday's sharp selloff. The deal is not finalized, and Iran has called the US proposal an "American wishlist" -- making the next 24-72 hours a critical window.

What Happened

Japanese markets were closed for much of the week due to the Golden Week holiday. When they reopened Thursday morning, the Nikkei 225 surged to an intraday all-time record high, catching up with a global equities rally that had already pushed US and European indexes to record levels on Wednesday.

The catalyst: a report by Axios on Wednesday that the United States and Iran were close to a one-page memorandum of understanding (MOU) to end the war and set a framework for nuclear negotiations. US envoys Steve Witkoff and Jared Kushner have been involved in talks conducted both directly and through intermediaries, including Pakistan as a mediator.

President Trump posted on Truth Social that the Strait of Hormuz would be "open to all, including Iran" if Tehran agreed to terms -- and threatened renewed, intensified bombing if it did not. He also briefly paused the US military's "Project Freedom" escort operation through the strait to allow time for a deal to be finalized.

Iran's Revolutionary Guards Navy separately posted that "safe, stable passage through the Strait of Hormuz will be ensured" with new protocols in place, without elaborating on what those procedures entail. However, Iran's Foreign Ministry called the US proposal "an American wishlist [and] not a reality," injecting immediate uncertainty into the market reaction.

Why Markets Moved

The Strait of Hormuz carries approximately one-fifth of the world's oil supply. It has been blockaded by Iranian forces since late February, triggering a global energy crisis. Brent crude had risen as high as $126 per barrel earlier in the conflict. The prospect of the strait reopening and oil flowing freely again is the central driver behind the sharp repricing across all asset classes.

On Wednesday (US session), the reaction was significant across the board:

  • S&P 500: closed up 1.5%, hitting a record high
  • Nasdaq: closed up 2.0%, also at a record
  • Dow Jones Industrial Average: up over 610 points
  • Russell 2000: up 1.5%
  • European Stoxx 600: closed up 2.3%; FTSE 100 up ~2%; DAX and CAC 40 up ~3%
  • WTI crude oil: fell as much as 15% intraday to $88, closing down 7% at $95.08
  • Brent crude: fell as much as 11%, closing down 7.8% at $101.27
  • Wholesale gas and jet fuel: down 5-6%
  • US Treasury yields: dropped sharply on improved risk sentiment

Airline stocks rose on improved prospects for the restoration of normal jet fuel supply chains and summer travel routes across Asia and Europe.

Overnight into Thursday, the risk rally extended into the Asian session:

  • Nikkei 225: hit an intraday all-time record high, with strong gains led by technology stocks
  • MSCI Asia-Pacific index: hit an all-time record
  • Bitcoin (BTC): approached $82,000, its highest level since January 31
  • Ethereum (ETH): cleared $2,400

Nikkei Record: Why Japan Was a Special Case

Japan was on public holiday (Golden Week) when the Iran deal headlines first broke on Wednesday. This made Thursday morning the first opportunity for Japanese equity markets to respond. The catch-up buying was substantial, with tech stocks leading gains. The Nikkei's intraday record reflects both the catch-up dynamic and renewed global confidence in the risk-on trade.

Japan is particularly sensitive to energy prices given its near-total dependence on imported oil and gas. A sustained drop in Brent below $100 per barrel would represent meaningful relief for Japanese corporate margins and consumer costs.

Bitcoin and Crypto: Riding the Risk-On Wave

Bitcoin's move toward $82,000 represents a significant level. At around $81,000-$82,000, BTC is trading at its highest since January 31, 2026 -- before the Gulf energy crisis fully repriced global risk assets. The correlation with equities has been tightly maintained throughout the Iran conflict period: when global risk appetite rises, crypto tends to benefit alongside stocks.

Ethereum clearing $2,400 similarly represents a multi-month high. Traders appear to be treating the prospect of lower energy costs, lower inflation pressure, and lower Treasury yields as a risk-positive macro environment that extends to digital assets.

No specific crypto-native catalyst is driving these moves. The gains are macro-driven and dependent on the Iran deal narrative remaining intact.

Implications for Traders

Equity traders (stocks and futures)

The Nikkei record is a confirmation signal that the rally has legs in Asian equities. US equity futures will be closely watched as European markets open later Thursday. If oil stays below $105 and the deal narrative holds, the path of least resistance for US equities is higher. However, the gap between where oil was trading (above $100 before Wednesday) and where it could stabilize is enormous -- a failed deal could send Brent back toward $115-120 quickly.

Energy and futures traders

WTI at $95 and Brent at $101 is still pricing in a significant risk premium. Oil was trading near $60-70 before the Gulf crisis. If a formal agreement is reached and the Strait reopens to normal traffic, further downside in crude is likely. But traders should be cautious: Iran called the US proposal "an American wishlist," and nuclear concessions have historically been the most difficult part of any Iran deal.

Crypto traders

Bitcoin at $82K is a technically significant level -- it is approaching the January highs and is within range of prior resistance. If the macro backdrop holds (stocks at records, yields falling, oil declining), BTC could extend further. However, a deal breakdown would likely trigger a sharp reversal across all risk assets including crypto.

Potential Positives vs Negatives

Potential positives:

  • A formal MOU could be signed within days, immediately reopening the strait and unlocking 4-5 million barrels per day of oil flow
  • Lower energy prices reduce global inflation pressure, giving central banks more flexibility
  • Falling bond yields reduce borrowing costs for consumers and businesses
  • Airline and logistics sectors rebound sharply if jet fuel and shipping costs normalize
  • Japan and other energy-importing economies receive immediate economic relief
  • Crypto and growth assets continue to benefit from improved global risk sentiment

Potential negatives:

  • Iran has explicitly called the US proposal an "American wishlist," suggesting the nuclear concessions (including removing highly enriched uranium) remain deeply contentious
  • Even if a one-page MOU is signed, "more detailed nuclear negotiations" could drag for months, keeping uncertainty elevated
  • Trump's threat to bomb Iran "at a much higher level" if no deal is reached introduces binary tail risk
  • A deal collapse could send oil back toward $115-125 within days, reversing the entire equity rally
  • Inflation relief may be limited if oil stays above $90 -- still elevated by historical standards

What Could Happen from Here

Base scenario (roughly 50% probability)

A one-page MOU is signed within 48-72 hours, establishing a framework for further nuclear talks. The strait does not immediately reopen fully, but reduced tension keeps oil below $105. Equities consolidate at or near record highs. BTC holds above $78,000. Detailed negotiations begin but take weeks or months. Markets gradually price in a new normal of lower geopolitical risk in the Gulf. Confirmation: formal signing announcement, Iran stops harassing commercial shipping.

Upside scenario (roughly 25% probability)

A deal is signed and the strait reopens to commercial traffic within 1-2 weeks. Brent falls back toward $85-90. US inflation data surprises to the downside in the following CPI print. Stocks add another 2-4% and BTC pushes toward $90,000. Airline and energy-importing sectors see the sharpest gains. Confirmation: Iran removes mines from the strait, US lifts the commercial blockade of Iranian ports.

Downside scenario (roughly 25% probability)

Nuclear concession talks break down. Iran formally rejects the MOU. Trump restarts and escalates "Project Freedom" operations. Oil spikes back toward $115-120. Equities sell off 3-5% from current record levels. BTC drops back toward $72,000-75,000. Bond yields spike on renewed inflation fears. Confirmation: official Iranian rejection statement, renewed Hormuz mine incidents or military exchanges.

What to Watch Next (24 Hours)

  • Official statements from Tehran and Washington: Any formal announcement of MOU signing or a rejection will be the most immediate binary catalyst
  • Strait of Hormuz commercial traffic: Whether civilian shipping attempts to transit and whether Iran enforces or relaxes its controls
  • Oil price stability: WTI holding below $100 and Brent below $105 would signal the deal narrative is holding
  • US equity futures: Thursday premarket will indicate whether the US session continues to build on Wednesday's records
  • Bitcoin $82K-$84K range: A clean break and hold above $82K would confirm bullish momentum; a rejection there could set up a retest of the $78K-$79K zone
  • Pakistan diplomatic channel: Pakistan is mediating; any statement from Islamabad on the status of the MOU review will be a leading indicator

FAQ

Q: Why did Japan's Nikkei hit a record when the news broke 12+ hours ago?
A: Japanese markets were closed for Golden Week, a national public holiday. Thursday was the first opportunity for the Tokyo Stock Exchange to react. The catch-up rally was particularly sharp because Japan is one of the world's largest energy importers and stands to benefit significantly from lower oil prices.

Q: Is this deal confirmed?
A: No. As of early Thursday morning UTC, a framework is reportedly under negotiation but no MOU has been signed. Iran has publicly called the US proposal "an American wishlist" and not a confirmed agreement. All market moves so far are based on deal expectations, not a done deal.

Sources

NBC News | The Guardian | Reuters | CoinDesk

For more context on Wednesday's oil crash and US equity session, see our earlier coverage: Oil Crashes 8% as US-Iran Peace Deal Enters 48-Hour Window.

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Header image source: pexels by David McBee. License: PEXELS.