Oil Prices Decline as Trump Eases Tensions with Iran; Stocks Rebound

Oil prices experienced a significant drop on Thursday following a shift in rhetoric from US President Donald Trump regarding Iran, alleviating concerns about potential conflicts impacting global oil supplies. Concurrently, US stock markets bounced back after enduring two days of losses.

Brent North Sea crude and West Texas Intermediate, the primary international oil benchmarks, both dropped over four percent. This decline came after Trump indicated on Wednesday that he would “watch it and see” about any US intervention in Iran, and also noted that he was informed about a halt in the killings of local demonstrators.

Previously, crude prices had risen due to Trump's comments about supporting the Iranian populace amidst a crackdown on protests, leading to fears of supply interruptions. However, his recent remarks helped diminish geopolitical tensions affecting oil prices.

“As the friction lessens between Iran and the United States, the political risk premium in oil prices is quickly subsiding,” stated Kathleen Brooks, research director at XTB.

In the equities domain, improved investor sentiment followed strong earnings disclosures. Taiwanese semiconductor giant TSMC reported fourth-quarter earnings that surpassed expectations, propelling technology stocks forward. Early in the session, the Nasdaq rose by over one percent, buoyed by gains from leading semiconductor firms.

Later, some profit-taking was noted among major tech and chip stocks, as observed by Briefing.com analyst Patrick O’Hare.

US equities had previously faced declines following remarks from US Commerce Secretary Howard Lutnick, who warned that semiconductor companies manufacturing outside the US could encounter tariffs up to 100 percent.

Despite fluctuations, all three principal US indexes managed to close in positive territory. The S&P 500 increased by 0.3 percent, while shares of Morgan Stanley and Goldman Sachs surged by 5.8 percent and 4.6 percent respectively, buoyed by strong profits driven by a rise in mergers and acquisitions.

In Europe, London's FTSE 100 hit a new record high backed by data indicating a rebound in the UK economy in November. Frankfurt's markets rose after reports showed Germany narrowly escaped a third consecutive year of recession with modest growth in 2025. Conversely, stocks in Paris dipped slightly, impacted by falling shares of TotalEnergies due to declining oil prices.

Asian markets presented a mixed picture, with Tokyo closing down by 0.4 percent after recent gains linked to speculation that Prime Minister Sanae Takaichi could call early elections amid favorable approval ratings.

In commodities, silver prices fell by 0.3 percent after an earlier drop exceeding seven percent, while gold prices also dipped slightly, easing from recent highs.