Goldman Sachs CEO David Solomon said financial markets have shown a surprisingly benign reaction to the Iran war as the conflict enters its fifth day. Speaking at the Australian Financial Review Business Summit, Solomon expressed surprise at the market's calm response given the conflict's magnitude. Investors have been closely monitoring oil prices after Iran announced the Strait of Hormuz closure, threatening vessels passing through.

Solomon noted it will take weeks for markets to fully digest the implications of the conflict in both the short and medium term. Key questions remain about whether the conflict becomes more prolonged and whether it starts to filter through to energy supply chains or affect consumer sentiments globally. The Goldman Sachs CEO emphasized there is insufficient information or data at this point to make clear predictions.

Major U.S. indices are trading slightly higher Wednesday, while U.S. Treasury yields have been rising, defying typical safe-haven behavior. During geopolitical conflicts, investors usually flock to bonds, pushing prices up and yields down. This time, bond prices are falling and yields climbing as investors worry that higher energy prices could stoke inflation and keep interest rates elevated for longer. Oil prices were calmer early Wednesday after President Trump said the U.S. would provide insurance to tankers in the Persian Gulf.