Middle East de-escalation hopes lift stocks as oil and metals jump on supply risks

Global markets are being driven today by shifting geopolitical dynamics in the Middle East, particularly signs of potential de-escalation between the U.S. and Iran alongside ongoing supply risks in key commodities. President Trump stated that the U.S. is in “serious discussions” with what he called a more reasonable regime in Iran to end U.S. military operations there, which investors interpret as a possible step toward reducing regional conflict. This has eased some fears of a prolonged military confrontation that could disrupt global trade and energy flows, supporting a broad move higher in global equities. At the same time, Trump warned that if no agreement is reached soon and the Strait of Hormuz remains constrained, the U.S. could target Iranian critical infrastructure. That threat, combined with recent Iranian airstrikes on Middle East metal production facilities, is keeping risk premia elevated in key commodities. Oil prices have jumped, reflecting both hopes for eventual de-escalation and current concerns about supply through one of the world’s most important energy chokepoints. Aluminum prices have also surged to multi‑year highs after damage to regional production capacity, reinforcing worries about tighter global supply chains for industrial metals. The net effect for global markets is a risk‑on tone in equities, supported by relief that diplomacy is advancing, but with continued volatility and upward pressure in energy and metals that could feed into inflation expectations and future central bank policy decisions.