A tentative ceasefire between Israel and Iran, announced by U.S. President Trump, buoyed stocks while oil prices fell. The truce remained precarious after Iran launched missile attacks shortly after the ceasefire took effect. Despite the geopolitical volatility, market reactions were positive, with U.S. stock futures gaining and European markets following suit. Oil prices tumbled as fears of an Iranian blockade of the Strait of Hormuz eased, losing much of the recent risk premium. The market response was underlined by comments from analysts suggesting that despite regional tensions, investor sentiment had improved significantly.
"The Middle East may still be smoldering, but as far as markets are concerned, the fire alarm has been shut off," commented Stephen Innes of SPI Asset Management, expressing optimism in the wake of geopolitical tensions.
Despite unease surrounding the ceasefire announcement between Israel and Iran, investors reacted positively, with U.S. stocks showing gains and oil prices declining after a volatile start.
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