Crude futures won more than 3% after the US and Iran traded strikes and Tehran again insisted that any deal must cover Israel’s escalating offensive into Lebanon.
European stock markets traded mixed after gains for main equity indices in Asia.
The dollar firmed against main rivals as focus fixed on the US-Iran conflict.
“Even though there have been (fresh) attacks from both sides, the market is holding onto the fact that… an elusive deal” can be reached, noted Kathleen Brooks, research director at XTB trading group.
Meanwhile, “there is no reason to think that the AI theme will fade… Thus, we may continue to see outperformance of US and some Asian stocks.”
Across Asia, Seoul led the rally, jumping by more than 4%, boosted by continued demand for chipmakers and firms centred on artificial intelligence.
Shares in memory chip giant Samsung Electronics surged more than 9%, while rival SK hynix rose over 2%.
“Investors continue to embrace the AI boom while assigning a higher probability to an eventual agreement between Washington and Tehran,” said independent markets analyst Stephen Innes.
“The reason is simple. Artificial intelligence remains the dominant engine of market psychology, and as long as Washington and Tehran continue to exchange draft proposals rather than missiles, investors appear willing to give diplomacy the benefit of the doubt,” he added.
Nvidia on Monday unveiled a powerful laptop chip for Windows machines, staking its claim in the market for next-generation consumer PCs integrated with artificial intelligence.
Its shares were up more than 2% in premarket trading.
Elsewhere, EasyJet’s share price jumped around 10% Monday after the British no-frills airline denounced as “opportunistic” a possible takeover bid from a US private equity firm.
Castlelake, which owns 2.14% of EasyJet, revealed late Friday that it was considering an offer for the carrier, which operates mainly across Europe.
EasyJet slammed what it called the “highly opportunistic timing” by Castlelake after falls to its share price and deeper losses after the Middle East war sent jet fuel costs rocketing.