US and Iran signaled de-escalation, sparking a five-day rally in emerging-market assets. Bloomberg reports investors seized on hopes for reduced conflict risk, driving gains across currencies, equities, and commodities. The move follows months of heightened tensions that had weighed on these markets.

Markets had priced in prolonged uncertainty, with emerging-market assets showing weakness amid fears of potential military action. The recent signals suggest a shift, with traders unwinding defensive positions and shifting capital toward higher-risk, higher-reward opportunities. This reversal marks the first positive momentum in five trading sessions.

The rally underscores how geopolitical risk perceptions directly impact investor sentiment. While US and Iran tensions remain fluid, the immediate market reaction highlights the sensitivity of these assets to diplomatic developments. Emerging-market assets now face renewed scrutiny as traders assess whether this is a sustainable trend or a temporary reprieve.