Markets Rattle As Israeli Aggression Fuels Regional Tensions

Stocks fell worldwide, while safe-haven assets like oil and gold climbed.

Investor anxiety over the Zionist regime’s reckless actions and the risk of a wider regional war shook markets already bracing for major central bank decisions.

US President Donald Trump abruptly left the Group of Seven summit in Canada, calling for an evacuation of Tehran and expressing vague hopes for ending the standoff with Iran.

"I want a real end to the nuclear dispute," Trump stated, hinting at sending senior officials to Tehran—an apparent contradiction given the US's repeated provocations.

S&P 500 futures dropped by 0.6%, while crude oil jumped as much as 2.2% to reach $74.85 a barrel, marking an 11% rise over the past week.

Gold also saw gains, increasing 0.3%, as global investors sought stability in traditional stores of value amid rising conflict.

Chris Beauchamp, chief market analyst at IG, said: "Investors are trying to take all this on board. It is very difficult at the moment, I think. And there's an understandable degree of nervousness."

European stocks followed suit, with the STOXX 600 down nearly 1%, reaching a three-week low.

Despite the escalating Israeli aggression, there have been no reports of oil supply disruptions.

However, a collision between two ships in the Gulf of Oman briefly shook the oil market overnight, raising further alarm in a volatile region central to global energy flows.

Analysts fear that any Israeli provocation could easily spark a broader Middle Eastern conflict, threatening the region’s stability and global energy security.

Financial volatility remained moderate, with the VIX index climbing to 20.8—well below previous crisis levels.

"This is happening at a point in time where we are less sensitive," said Bjarne Breinholt Thomsen of Danske Bank. "The macro economy is ... showing that financial markets are relatively resilient."

In monetary policy, the Bank of Japan kept short-term rates unchanged at 0.5% and announced a slower reduction of its government bond holdings.

Weak bond demand and growing concern over Japan’s fiscal health pushed borrowing costs to record highs last month.

Meanwhile, the US Federal Reserve is expected to hold interest rates steady Wednesday, with investors eyeing updated economic projections in light of Trump’s tariff policies.

Markets are currently pricing in two interest rate cuts by year-end.

Elsewhere at the G7 summit, tariff talks between Japan and the US yielded no breakthroughs, and negotiations with Britain left key trade issues unresolved.

Gold rose 0.4% to $3,395 an ounce, bringing its year-to-date gain to 30%, as investors brace for continued conflict driven by Israeli military escalation.