Dubai: Global financial markets regained momentum on Tuesday as easing tensions between Israel and Iran encouraged investors to return to riskier assets, boosting technology stocks while dragging oil and gold prices lower.
Futures linked to the Nasdaq 100 climbed 0.7%, signaling a second consecutive day of gains for technology shares following last week’s selloff. S&P 500 futures also advanced 0.4%, reflecting renewed confidence among investors.
Asian markets led the rebound, with South Korea’s Kospi index surging 8.2%, driven by strong gains in semiconductor and technology stocks. European equities followed suit, as the Stoxx Europe 600 rose 0.5% amid renewed optimism surrounding artificial intelligence-related investments and reduced concerns over geopolitical instability.
Oil Prices Slide as Conflict Fears Ease
Energy markets saw a notable decline as concerns over a broader Middle East conflict began to fade. Brent crude dropped 2%, moving closer to $92 per barrel after Israel and Iran signaled a halt in direct military exchanges.
Adding to the improved sentiment, US President Donald Trump stated that a potential peace agreement between Washington and Tehran could be within reach, reinforcing expectations that regional tensions may continue to ease.
The decline in oil prices helped alleviate inflation worries, as sustained increases in crude costs often translate into higher fuel prices, tighter monetary policy, and increased pressure on consumers.
Meanwhile, US Treasury markets recorded modest gains, with the benchmark 10-year Treasury yield slipping to 4.55% as investors scaled back expectations of additional interest-rate hikes.
Investors Return to AI-Focused Stocks
The renewed strength in technology shares suggests that investors remain confident in the long-term growth potential of artificial intelligence despite recent market volatility.
Sentiment was further supported by reports that OpenAI has confidentially filed for an initial public offering, highlighting continued enthusiasm for AI-related companies. At the same time, Amazon’s record-breaking Canadian dollar bond issuance demonstrated that major technology firms continue to attract significant investor capital.
Market participants increasingly view the recent pullback as a temporary pause rather than a reversal of the broader growth trend driven by artificial intelligence, cloud computing, and semiconductor demand.
Gold Weakens as Safe-Haven Demand Falls
Gold prices remained under pressure, trading near $4,300 per ounce as investors reduced exposure to traditional safe-haven assets following signs of de-escalation in the Middle East.
According to Ahmad Assiri, Research Strategist at Pepperstone, both Israel and Iran have indicated a willingness to pause direct military actions, helping to calm market concerns.
He noted that Israel has signaled it will refrain from additional strikes for the time being, while Iran has declared its latest military operation complete.
“The latest developments suggest that markets are witnessing a release of accumulated geopolitical tension rather than the beginning of a broader escalation,” Assiri said.
The easing of fears has reduced demand for defensive assets such as gold, although traders remain cautious and continue monitoring potential risks involving Lebanon, regional shipping routes, and critical energy infrastructure.
Markets Remain Alert to New Developments
Oil prices had previously surged by as much as 5% earlier in the week amid concerns that the conflict could threaten regional energy supplies. However, most of those gains have now been erased as investors reassess the likelihood of further escalation.
Assiri said the latest market movements indicate that a significant portion of the geopolitical risk premium has been removed from oil prices, though markets remain highly sensitive to any developments that could disrupt energy supplies.
Gold has experienced a similar shift, with its performance increasingly tied to geopolitical developments. While prices remain near the $4,300 level, the precious metal has struggled to build momentum as tensions ease.
“Gold’s recent performance highlights how closely investor sentiment has become linked to geopolitical events,” Assiri said. “As tensions subside, demand for safe-haven assets continues to weaken.”
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