Traders are stepping into Wednesday after a major shift in sentiment triggered overnight.
The key moment came when the ultimatum from Donald Trump expired. Markets were bracing for escalation, but instead got the opposite. Trump announced a suspension of military actions against Iran for two weeks.
That decision immediately changed the tone across global markets.
The reaction was clean and consistent with a risk-on scenario. Equity indices moved sharply higher, with futures flashing green across the board. Investors are clearly pricing in a temporary easing of geopolitical risk.
On the currency market, the US dollar weakened, while safe-haven flows reversed. Earlier positioning, such as buying yen or dollar, is now being unwound.
Commodities are showing a mixed but logical reaction. Oil is dropping sharply as the risk of supply disruption decreases. On the other hand, metals like Gold, Silver, and copper are moving higher, benefiting from improved sentiment and renewed demand.
Cryptocurrencies are also reacting strongly. Bitcoin and Ethereum are pushing higher, continuing their recent recovery and reflecting increased appetite for risk.
This move is strong enough to shift the short-term outlook. For now, the market is likely to trade under this more optimistic tone, at least for the duration of the announced pause.
Looking at the macro calendar, attention may briefly return to fundamentals. Today’s key event is the FOMC meeting minutes, which could influence expectations around monetary policy.
Still, for now, geopolitics has taken a step back, and markets are reacting accordingly.