The market relief that followed the April US-Iran ceasefire has dissipated, with oil and bond markets repricing the risk of renewed conflict in the Middle East.
While equity markets have shown remarkable resilience, fixed-income and energy traders are adjusting positions in response to the escalating geopolitical backdrop.
Wall Street opened with little direction on Thursday, as major indices including the S&P 500 and Dow Jones Industrial Average appeared unfazed by the latest developments.
This divergence highlights a growing disconnect between risk-on equity sentiment and the defensive positioning seen in commodities and rates.
Investors seem to be compartmentalizing the geopolitical threat, viewing it as a manageable risk for corporate earnings but a material driver for energy supply and inflation expectations.
Oil prices had previously stabilized around pre-war levels, signaling a temporary pause in volatility.