Geopolitical tensions from U.S.-Iran talks and oil moves set the tone for markets today

Global markets today are being driven primarily by renewed geopolitical tensions surrounding the resumed U.S.-Iran nuclear negotiations, which are fostering a cautious, risk-off mood across assets. Talks in Geneva ended without a concrete agreement, but both sides committed to continue discussions in Vienna next week, focusing on sanctions relief and Iran’s nuclear program. The lack of progress and the possibility of further escalation in the Middle East are heightening uncertainty for investors, who worry about potential disruptions to energy supply routes, new sanctions, or broader regional instability. This has translated into choppier trading conditions and a preference for safer assets, as reflected in Thursday’s mixed equity performance and a rise in volatility gauges. Energy markets are also in focus. Despite the geopolitical tension, spot oil prices had recently eased, with WTI crude around the mid-$60s per barrel and Brent near the low-$70s. However, oil futures moved about 2% higher into Friday as pressure on Iran increased, signaling that traders are starting to price in a higher risk premium for crude. Any sustained move higher in oil prices could feed into global inflation pressures, complicating central banks’ efforts to manage interest rates and potentially weighing on global growth expectations. This dynamic makes energy markets a key channel through which the U.S.-Iran situation can affect global stocks, particularly in energy, transportation, and manufacturing sectors. Broader macro signals are mixed but secondary to geopolitics today. U.S. jobless claims ticked up modestly to 212,000, suggesting a still-resilient labor market with only slight softening. While this data point alone is not enough to shift expectations for central bank policy, it adds nuance to the growth outlook and will be monitored alongside upcoming economic releases. Overall, the dominant driver for global equities today is the elevated geopolitical risk from U.S.-Iran negotiations and its implications for volatility, risk appetite, and energy prices, with economic data playing a supporting but less decisive role in shaping market direction.