Traders are betting the US-Iran conflict has de-escalated, driving stock markets to new highs this week. The shift in sentiment has triggered a broad sell-off in the US dollar as investors rotate into riskier assets. Oil prices have stabilized around $90 per barrel, reflecting reduced geopolitical risk premiums after weeks of volatility.

This market reaction signals growing confidence that the immediate threat of military escalation has passed. The simultaneous rally in stocks and decline in oil prices suggests traders expect economic disruption to be limited. Treasury yields have ticked higher as investors move away from safe-haven assets, while emerging market currencies have strengthened against the greenback.

The rapid repricing underscores how quickly markets can shift when geopolitical tensions ease. With corporate earnings season approaching, investors appear focused on fundamentals rather than conflict scenarios. The dollar's weakness could provide a tailwind for US multinational companies' overseas profits when translated back into dollars.