Equity and energy markets surged on Tuesday as investors bet on a potential de-escalation in the Middle East, driven by reports that Iran is preparing a diplomatic proposal aimed at satisfying the United States.
The prospect of a rapid resolution to the conflict has triggered a sharp repricing of risk assets, with traders front-running the potential removal of economic sanctions that have weighed on global growth.
The rally follows comments from President Donald Trump, who indicated in a phone interview with Reuters that Tehran is working on a plan to meet American demands.
While the specifics of the proposal remain undisclosed, the mere suggestion of a breakthrough has been enough to lift sentiment across major indices.
The market reaction underscores how sensitive global risk appetite remains to geopolitical developments in the region.
However, the optimism is tempered by the reality that the peace framework is still in its infancy.