Oil surged in early European trading after Israel and Iran exchanged artillery strikes, marking the first hostile exchange since the April ceasefire. The flare‑up threatened progress on a long‑awaited peace framework and pushed Brent crude above $90 a barrel. Traders priced heightened geopolitical risk into energy markets, lifting risk‑on sentiment. The price jump also lifted energy‑sector ETFs, drawing inflows from hedge funds seeking a hedge against geopolitical shock.

U.S. Treasury yields slipped as investors fled bonds, while the dollar firmed against a basket of currencies. European blue‑chip indices retreated, reflecting uncertainty over regional stability. Meanwhile, futures on major U.S. tech futures climbed, buoyed by expectations that the conflict would not immediately dent corporate earnings. Analysts cite solid Apple and Microsoft forecasts that appear insulated from the flare‑up. The divergence highlighted sector‑specific risk appetite.

President Trump told reporters he urged Prime Minister Netanyahu not to retaliate, but Israeli jets still struck central and western Iran. The mixed signals underscored the fragile nature of U.S. diplomatic influence in the Middle East. Market participants now monitor any further escalation for its potential to reshape oil supply dynamics and volatility across asset classes.