Oil prices fall over 4% as US-Iran peace talks raise hopes of easing Middle East supply disruptions

Oil prices plummeted over four percent on Monday, following reports that President Donald Trump may negotiate with Iran to end the Middle East conflict ahead of the US midterm elections on Tuesday. Axios reported that Vice President Kamala Harris had written to Iranian security chief Mohsen Rezaei about potential talks, marking the highest-level engagement in months.

Energy giants' shares plummeted as gas prices fell, while other sectors benefited from lower fuel costs. Analyst Arne Lohmann Rasmussen from Global Risk Management suggested the signals might be strategic for the election. However, attacks on shipping in the Strait of Hormuz continued, and the firm maintained a higher-than-ever outlook for energy prices.

Voters anticipate a Democratic gain in Congress, imposing political constraints on Trump for the first time in two years. The loss of Republican dominance would place him in an unfamiliar situation: a lame-duck period with high inflation, a faltering war against Iran, and hostile Democratic investigations. Investors are bracing for turbulence before the midterms while evaluating how companies are spending on AI initiatives.

Tech stocks suffered further after Friday's sell-off, with Apple, Advanced Micro Devices, and Palantir facing disappointing earnings. Japanese chipmaker Kioxia saw its share price drop by nearly 16 percent after issuing a cautious outlook that fell short of expectations. Amid the turmoil, Bitcoin and other cryptocurrencies remained relatively stable following Binance's largest-ever hack, which saw over $6 billion stolen.

Corporate gains were limited, with Alstom shares falling over 25 percent after the company revealed production issues with its Coradia Max trains, forcing a profit target downgrade.