Oil prices plunged 10% after Trump claimed productive talks with Iran, despite Tehran denying negotiations. Energy markets and inflation-sensitive bonds faced sharp declines as investors grappled with escalating geopolitical risks. Global stocks fell 6% since the conflict erupted, though losses remain below April’s tariff-driven slump. Markets oscillate between fears of supply disruptions and hopes for a 15-point peace plan brokered by Pakistan, though skepticism lingers over Trump’s credibility.

The U.S. dollar rose initially amid safe-haven demand but faces long-term risks as the conflict tests the petrodollar regime. Deutsche Bank’s George Saravelos warned that Middle East instability could erode the dollar’s dominance in global trade, citing exposed vulnerabilities in energy-dependent economies. While Trump’s policies temporarily boosted the dollar, analysts note its ascent reflects risk rebalancing, not renewed confidence.

U.S. equities showed resilience due to energy independence, but long-term diversification trends persist. Bankers argue Trump’s anti-regulatory stance accelerates green energy adoption, with one citing him as a catalyst for sustainable investing. However, inflation pressures from energy and food price spikes threaten to prolong high interest rates, complicating portfolio strategies.

Markets remain trapped between binary outcomes: a catastrophic energy shock or a Trump victory lap. With volatility concentrated in energy and emerging markets, investors await clarity. For now, the petrodollar regime’s fragility and green energy momentum dominate strategic calculations.