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(Bloomberg) — Asian stocks were poised to extend gains as optimism over a potential US-Iran deal to reopen the Strait of Hormuz lifted risk appetite and sent oil prices lower.

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Equity-index futures for Japan and Australia pointed to gains, while markets in Hong Kong and South Korea were set to reopen after a holiday. Futures tied to Wall Street benchmarks largely held onto Monday’s gains, when prices didn’t settle due to a holiday in the US, and remained above Friday’s close.

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The dollar was steady against major peers in early trading after weakening Monday. Gold edged up 0.1% to about $4,575 an ounce, with the non-interest-bearing metal supported by bets lower oil prices could give central banks more room to cut interest rates. Brent tumbled more than 7% to $96.14 a barrel on Monday, the lowest level in more than a month, in holiday-thinned trading.

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Risk appetite improved after US President Donald Trump said that negotiations with Iran over an interim deal to extend their ceasefire and reopen the strait were “proceeding nicely.” Pakistan’s military chief, Asim Munir, the main interlocutor between the warring sides, told China an agreement is “close to being reached.”

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Global stocks hit a record Monday as traders bet the worst of the Middle East energy shock may be over after months of conflict disrupted oil supplies, stoked inflation fears and drove bond yields higher. A deal to reopen the Strait of Hormuz and extend the US-Iran ceasefire could further ease pressure in the oil markets and spur the AI-led rally in equities.

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There is “a presumption that the Strait of Hormuz is going to be opened in the not too distant future and I think the market is betting that the supply demand situation rebalances and things are going to normalize,” said Bart Melek, global head of commodity strategy at TD Securities.

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Key sticking points remain unresolved, however, including the future of Iran’s nuclear program. Iran’s Tasnim news agency reported the draft agreement could still collapse because of US objections to several provisions, including Tehran’s demand that frozen assets be released.

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Tensions remain as American and Israeli warplanes targeted several Iranian vessels south of Larak Island in the Strait of Hormuz, state-run Nour News reports, citing local sources.

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“A consensus was reached on many of the topics discussed, but no one can claim that the signing of an agreement is imminent,” Iran’s Foreign Ministry Spokesman Esmail Baghaei told reporters on Monday.

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In other geopolitical news, Russian Foreign Minister Sergei Lavrov urged US Secretary of State Marco Rubio to evacuate American citizens and diplomats from Kyiv ahead of what Moscow said would be an escalation of strikes on the Ukrainian capital, according to a statement from Russia’s Foreign Ministry on Monday.

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Attention is also turning to the bond market ahead of Thursday’s release of the April US personal income and spending report, which includes the PCE index, the Federal Reserve’s preferred inflation gauge.