Global markets were shaky on Tuesday as rising tensions in the Middle East kept investors on edge, with oil prices climbing above $110 a barrel ahead of a key deadline set by Donald Trump for a deal with Iran.
Market Analyst says investors largely stayed cautious, adopting a wait-and-see approach as uncertainty over the conflict deepened.
The ongoing war has already rattled markets since late February, especially after Iran effectively shut down the Strait of Hormuz a critical route for global oil supplies.
Brent crude rose to about $111 per barrel, marking a surge of more than 50% since the conflict began, fueling fresh concerns about inflation and the global economy.
Despite hopes for a breakthrough, talks have made little progress.
Trump has set a firm deadline for a deal, warning that failure to reach an agreement could trigger further escalation, including potential strikes on key Iranian infrastructure.
Iran, however, is pushing back, insisting on a permanent end to the war rather than a temporary ceasefire. It has also resisted pressure to reopen the vital shipping route.
The tension has left markets unsettled. U.S. stock futures slipped, Asian markets showed mixed performance, and the dollar held firm as investors moved toward safer assets.
Analysts say the uncertainty is making it difficult for traders to take clear positions.
“There’s not much investors can do right now except wait,” one market strategist noted, pointing to the unpredictability of the situation.
Beyond market volatility, the conflict is raising fears of stagflation a mix of high inflation and slow economic growth.
Rising energy costs are already feeding into global prices, with early data from the U.S. showing increasing input costs for businesses.
Currency markets also reflected the cautious mood.
The dollar remained strong, while the Japanese yen hovered near levels that could prompt intervention by authorities in Tokyo.
Gold prices, typically seen as a safe haven, edged slightly lower in early trading.
For now, all eyes remain on whether a deal can be reached before the deadline or whether tensions will escalate further, with potentially wider consequences for the global economy.
