Global bond markets stabilized Tuesday after President Trump announced he would "hold off" on planned military action against Iran, creating room for peace negotiations at Gulf allies' request. Brent crude oil recovered above $110 a barrel following an earlier 2% slide, while the dollar strengthened against major currencies on reduced geopolitical risk.

Oil markets remain highly sensitive to Iran developments, with analysts noting Brent crude traded in nearly a $6 per barrel range Monday. The U.S. extended a sanctions waiver permitting purchases of stranded Russian oil for 30 days, potentially easing supply concerns for Asian buyers exposed to Middle East disruptions.

U.S. equity futures traded flat overnight, with the S&P 500 and Nasdaq showing little movement after Asian tech stocks stumbled. Market participants await pending home sales data for April, which could signal whether housing demand continues faltering amid persistent inflation pressures.

The bond market relief underscores how geopolitical de-escalation can provide temporary stability, though inflation concerns continue capping broader market gains.