Oil prices surged while global markets turned cautious after renewed US–Iran tensions over the weekend disrupted earlier optimism about easing conflict.
Brent crude jumped 5.5% as incidents in the Strait of Hormuz raised concerns about supply disruptions, while US equity futures and European stocks declined. Rising oil prices also pressured Treasuries on inflation fears, and the dollar edged higher as investors sought safety. Despite this, market movements were relatively modest and largely reversed last week’s optimism-driven gains, with Asian equities still managing slight advances and emerging markets recovering prior losses.
Investors remain focused on whether tensions will escalate or move back toward diplomacy, especially with a ceasefire nearing expiration and mixed signals from US and Iranian leaders. While some strategists believe markets have already priced in the worst of the conflict and may continue rising absent further escalation, uncertainty persists due to fragile negotiations and geopolitical risks.
Commodity markets reflected this unease, with natural gas prices spiking while gold, silver, and Bitcoin dipped. Overall, markets appear to be balancing cautious optimism about a resolution with the risk of renewed volatility if the conflict intensifies.
It is a quiet day for data releases, with Canadian CPI the only major point of focus.
