Global markets remain tense as investors fear deeper U.S. military involvement in the ongoing Israel-Iran conflict. Oil prices keep climbing as risk appetite dwindles.

Market Caution Amid Escalating Risks

President Donald Trump has called for Iran’s unconditional surrender, raising geopolitical tensions. Markets are starting to factor in the possibility of direct U.S. intervention, shifting sentiment towards a risk-averse stance.

“Clearly the Middle East situation remains unresolved, and President Trump’s comments imply that conditions could worsen,” stated Joseph Capurso from CBA.

Oil Prices Soar on Supply Concerns

• Brent crude increased 0.3% to $76.67 per barrel.

• WTI crude rose 0.43% to $75.16 per barrel.

These benchmarks surged over 4% on Tuesday due to heightened conflict risk premiums.

Global Equities Retreat

The cautious atmosphere affects global equity markets:

• MSCI Asia-Pacific ex-Japan fell 0.3%.

• EUROSTOXX 50 futures dipped 0.34%.

Risk-off sentiment is prevalent as traders scale back positions ahead of the U.S. Federal Reserve policy decision and key macroeconomic data releases this week.

Summary

Geopolitical developments continue to drive markets, with oil prices serving as a significant barometer of sentiment. As conditions in the Middle East progress, investors remain cautious, looking for clarity on geopolitical and monetary policy fronts.