US stock market sentiment is wavering as investors grapple with escalating tensions in the Middle East and mixed diplomatic signals from Washington. S&P 500 futures fell by 0.8%, reflecting ongoing uncertainty, particularly in the technology sector, where significant selling pressure has emerged. The lack of de-escalation among the US, Israel, and Iran raises recession risks, while a swift resolution could spark a relief rally.

The geopolitical turmoil is impacting market dynamics, with oil prices climbing back above $90 per barrel amid fears of supply disruptions. US Treasury yields have risen, indicating limited demand for safe-haven assets despite the heightened tensions. UBS warns that volatility will likely persist due to potential supply chain disruptions and the need for oil inventory replenishment, prompting a defensive stance in European markets.

Investors should remain vigilant as the situation develops, particularly regarding energy stocks and broader market volatility, which could influence portfolio strategies in the near term.

Source: xtb.com