Week in Review: Iran Deal Sparks Rally as ECB Hikes and KOSPI Slides on Broadcom AI Miss

The Quick Take

• Iran deal news triggered the week's biggest cross-asset reversal — oil fell, equities and gold rallied globally.
• ECB hiked rates after Euro area core inflation beat expectations at 2.5%, removing residual policy uncertainty.
• South Korea's KOSPI fell sharply as Broadcom AI guidance sparked semiconductor profit-taking globally.
• Brent crude's decline below $100 was the week's most-searched global macro query on market.news.
• Japan's Nikkei slipped 0.85% as semiconductor sector stress weighed on global tech-heavy indices.

The week's defining moment came when President Trump cancelled planned US military strikes against Iran and indicated a deal could be signed within days, triggering a sharp and broad cross-asset reversal. Oil prices fell materially as geopolitical risk premium unwound, while global equities climbed, gold retreated from haven highs, bond yields declined, and the dollar weakened against major currencies. The reversal concentrated in Friday afternoon US trading and compressed what had been building equity risk all week into a single bullish session. For investors positioned defensively, the speed of the move highlighted the asymmetric risk of holding risk-off hedges through a binary geopolitical catalyst.

The ECB delivered its expected rate hike on Thursday after Euro area core consumer prices came in above expectations at 2.5% year-on-year in May, removing the residual ambiguity that had given doves an argument for a pause. European markets edged higher post-decision, interpreting the hike as a policy-normalisation milestone rather than a signal of sustained tightening, particularly given the softness visible in forward-looking growth indicators across Germany and Italy. The ECB language around the path beyond June was deliberately non-committal, preserving optionality as the lagged impact of prior rate increases continues to filter through euro area credit markets and consumer demand.

The week's sharpest single-session equity decline occurred in South Korea, where the KOSPI fell as much as 7% on Friday after semiconductor-linked profit-taking intensified following Broadcom's AI revenue guidance update. The selloff spread through Asian supply chain stocks, weighing on Japan's already-declining Nikkei, and raised questions about whether the AI hardware cycle is entering a more selective phase where only direct enablers like Nvidia benefit at the expense of broader chipmakers. Looking ahead, US retail sales data and Federal Reserve speaker commentary next week will determine whether markets retain the constructive tone the Iran deal reversal generated heading into the H2 2026 calendar.

Synthesized from 5 sources.