WS #14360

The situation in the Middle East has seen a brief de-escalation as both the US and Iran have issued statements indicating a willingness to engage in diplomatic talks, which has slightly eased market tensions. However, the underlying instability remains, with the potential for renewed hostilities still present. The recent diplomatic gestures have not significantly altered the trajectory of oil prices, which remain elevated due to the ongoing concerns over the Strait of Hormuz. The Fed's rate hike expectations continue to weigh on market sentiment, but the recent diplomatic developments have introduced a slight counter-signal to the prevailing bearish narrative.