Wall Street rallies on Middle East de-escalation hopes

Financial outlets describe investors rapidly shifting between risk-on trades when ceasefire hopes rise and defensive positions when war worries return. They highlight that stock indexes in the US, Europe and Asia, as well as oil and currencies, are all moving on headlines about the Iran war rather than company earnings or domestic data. Many expect continued volatility as traders struggle to judge whether the conflict will end soon or keep disrupting energy supplies and inflation.

• •Global equity indexes such as the STOXX 600 and major Asian benchmarks have rallied on days when a Middle East ceasefire seems more likely.
• •Oil futures have spiked above $106 per barrel when comments from political figures reduce expectations of quick de-escalation in the Iran war.
• •Currency markets have seen the US dollar weaken when traders expect lower war risk and firmer global growth.
• •Investors are treating the Iran conflict as the main driver of short-term moves in energy, stocks and some emerging-market assets.
• •Market participants expect sharp day-to-day swings to continue until there is a clear signal on ceasefire talks.