Economy and politics roundup: Markets and geopolitics — May 25, 2026

News around possible U.S.-Iran talks and the status of the Strait of Hormuz dominated market sentiment on May 25, 2026. Hopes for a diplomatic solution eased some energy risk premia, prompting declines in oil prices and a softer dollar while equity futures gained on renewed risk appetite.

The sequence accelerated after weekend reports that negotiators were discussing a framework that could reopen the strait, although Washington warned against rushing the process. Those mixed signals kept volatility elevated: Brent and WTI crude slid toward recent lows, precious metals and safe-haven assets saw choppy flows, and currency pairs adjusted as investors re-priced geopolitical risk.

Domestic Turkish markets felt the spillover effects. The BIST-100 advanced intraday amid global risk-on dynamics, but Turkish lira assets continued to reflect local macro and liquidity concerns. Short-term government bond yields and FX rates showed sensitivity to both international headlines and domestic data releases, keeping market participants cautious.

The International Monetary Fund (IMF) framed the developments as part of a broader set of risks that can transmit to global growth and inflation through energy channels. IMF commentary highlighted that while de-escalation could ease near-term inflation pressures, persistent uncertainty may weigh on financial conditions and growth prospects for vulnerable economies.

Looking ahead, analysts emphasize that the market trajectory will hinge on verifiable progress in diplomatic talks and concrete steps to secure maritime transit. A durable agreement that restores Hormuz traffic would likely lower energy risk premia and support risk assets; conversely, breakdowns or delays would sustain volatility and keep central banks and investors in a defensive stance. Key near-term watch items include agreement text, oil supply indicators, central bank communications and incoming economic data.