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Global markets typically react fast to geopolitical conflicts, especially when military strikes involve oil-producing regions like the Middle East. Yet this time, investors showed unusual calm after the U.S. attacked three Iranian nuclear facilities over the weekend. Rather than scrambling for defensive stocks or safe-haven assets, markets remained mostly stable. Major indexes held steady, oil prices saw only modest gains, and safe-haven demand barely moved.

Why Global Markets Are Spookily Calm and Collected

Monday morning, the MSCI World Index, which tracks over 1,000 companies across 23 developed countries, slipped only 0.1%. European markets erased early losses, and U.S. stock futures for the S&P 500 rose 0.2%. Wall Street’s Fear and Greed Index stayed neutral, reflecting steady sentiment. U.S. crude oil gained just 1%, trading at $74.50 a barrel, while Brent crude hovered around $73. Gold prices slipped 0.1% to $3,380 per ounce. Even government bonds and the Swiss franc, typical safe-haven assets, saw limited movement.

Market experts say the restrained response reflects two key views. First, many investors see the U.S. strikes as a targeted effort to eliminate Iran’s nuclear threat rather than a signal of broader war. Second, market participants believe Iran’s ability to retaliate is limited.

“The markets view the attack on Iran as a relief with the nuclear threat now gone for the region,” explained Dan Ives, managing director at Wedbush. He added that the risk of escalation remains isolated, with minimal spillover to global markets.

The Strait of Hormuz: A Real Risk Factor

Iran’s foreign minister warned that the country “reserved all options” to defend its sovereignty. State media reported that lawmakers approved closing the Strait of Hormuz, a key oil shipping route where roughly 20 million barrels pass daily.

Historically, Iran has threatened to close the Strait during periods of heightened tension, including after the U.S. withdrew from the 2015 nuclear deal. But those threats were never acted upon.

Analysts remain skeptical that Iran will block the Strait, given the likely consequences. “Tehran understands that, if they were to close the Strait, the retaliation from the U.S. would be swift, punitive, and brutal,” said Marko Papic, chief strategist at GeoMacro Strategy.

However, if Iran does disrupt the Strait, markets would react sharply. Papic warned that oil prices could spike above $100, stocks would likely fall at least 10%, and investors would rush to traditional safe-havens.

For now, muted reactions reflect investor confidence that Iran’s options are limited and that the conflict remains contained.

Will the Global Markets Remain Calm For Good?

Despite current stability, uncertainty remains. Iran has vowed retaliation, and markets are watching closely for signs of escalation. At the same time, President Trump’s administration insists that its actions have restored military deterrence in the region.

Some strategists believe the strikes could even be bullish for markets if they lower nuclear risks and deter further conflict. Yardeni Research founder Ed Yardeni predicts the S&P 500 could reach 6,500 by year-end, citing renewed confidence in U.S. military strength. Meanwhile, others caution that risks tied to oil prices, trade disputes, and global inflation remain in play. As it is, a misstep by either side could still disrupt markets.

For now, global markets are balancing caution with optimism. Investors appear willing to hold their positions unless the conflict intensifies or disrupts global energy supplies.

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