Oil prices edged higher on Monday while stock markets sent mixed signals, as hopes for a breakthrough in talks between the United States and Iran faded once again.
The latest setback came after Donald Trump abruptly called off a planned diplomatic trip over the weekend.
The talks, which were expected to take place in Pakistan, had been seen as a possible step toward easing tensions in the ongoing conflict.
But Trump dismissed the effort, saying there was little value in continuing discussions that weren’t producing results.
Speaking later, he insisted Washington still held the upper hand and suggested Iran could reach out if it was serious about negotiations.
Interestingly, he also revealed that Tehran submitted a revised proposal shortly after the cancellation, though he offered no details on what had changed.
Even before that decision, there were signs the talks were struggling.
Iranian state media reported that Foreign Minister Abbas Araghchi had no plans to meet directly with US officials, with Pakistan instead acting as an intermediary for passing messages between both sides.
Behind the scenes, proposals are still circulating. One reported offer from Tehran includes reopening the Strait of Hormuz a critical global shipping route while postponing more contentious nuclear discussions. But both sides remain far apart.
Iran continues to push back against US restrictions on its ports, while Washington insists on restoring full access through the waterway.
Amid the diplomatic uncertainty, Araghchi arrived in Russia for talks with Vladimir Putin, following earlier stops in Pakistan and Oman.
The flurry of travel underscores how actively regional players are trying to broker some form of progress.
Markets reacted quickly. Oil prices climbed by more than one percent, supported by fears that supply could tighten further if tensions escalate.
Analysts warn that prices could spike sharply if the situation worsens, especially if shipping through the Gulf remains disrupted.
Stock markets, however, painted a more uneven picture. Asian markets like Tokyo, Seoul and Taipei saw gains, largely driven by optimism in the tech sector after strong forecasts from major US firms.
Elsewhere, trading was more subdued, with some markets slipping and others holding steady.
Investors are now watching two key developments: whether any real progress emerges from backchannel diplomacy, and how central banks particularly the US Federal Reserve respond to the economic pressure created by rising energy costs.
For now, the mood in global markets reflects a familiar pattern cautious optimism, tempered by the reality that the path to peace still looks uncertain.
