- Financial markets experienced a significant rollercoaster of sentiment today. The conflict in the Middle East continues to escalate, and emotions were running high from the very beginning of the day due to the expiring ultimatum from President Donald Trump to Iran.
- From the start of trading, markets faced a strong sell-off as investors worried about the potential implementation of the U.S. president’s warnings and possible retaliation from Tehran, which clearly heightened risk aversion.
- The situation changed in the early afternoon hours, just before the opening of the U.S. session. Donald Trump announced a five-day extension of the ultimatum, citing constructive talks with Iran. These statements were quickly contradicted by Tehran, which denied having any contact with the U.S. administration.
- Despite the conflicting messages, markets reacted very positively. Investors embraced the scenario of a de-escalation, leading to a sharp reversal of earlier moves. Crude oil immediately fell below 100 dollars per barrel, and overall market sentiment improved significantly.
- The Wall Street session started on a very upbeat note. Markets clearly bought into the narrative of potential peace talks, and major indexes rose strongly. The S&P 500 gained around 1,7 percent, the Nasdaq about 1,8 percent, and the Dow Jones nearly 2 percent.
- European markets also experienced high volatility. In the morning, clear declines dominated, but after the U.S. announcements, a strong rebound occurred. By the end of the day, most indexes closed in positive territory. The German DAX rose close to one percent, the French CAC 40 by around 0.8 percent, and the Spanish IBEX 35 by more than one percent. Only the UK FTSE 100 ended the session in negative territory.
- On the precious metals market, gold remains under strong pressure. At the time of writing, it is down more than three percent and trading below 4,500 dollars per ounce. Silver performed better, recording modest gains and testing the 70-dollar level.
- On the currency market, capital is flowing out of the U.S. dollar, which is losing ground against other major currencies, reflecting an improvement in global sentiment.
- The improvement in sentiment is also visible in the cryptocurrency market. Bitcoin is up more than three percent, testing the 71,000-dollar level, while Ethereum has gained around four percent and surpassed 2,150 dollars.
Source: xStation5
Source: xStation5
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