Middle East Truce Calms Markets: Focus Shifts to Fed Policy

European markets faced a downturn as investors weighed the implications of a fragile ceasefire between Israel and Iran, with crude oil prices stabilizing after recent declines. The prospect of an enduring truce eased fears of an energy shock that had kept markets on edge.

In the United States, President Donald Trump heralded the quick resolution of the conflict, expressing optimism for improved relations with Tehran, despite uncertainties about the impact of U.S. airstrikes on Iran's nuclear facilities. Concurrently, investors shifted their gaze to the U.S. economic landscape, amid signs of weaker-than-expected growth.

As Federal Reserve Chair Jerome Powell acknowledged the inflationary potential of higher tariffs, markets adjusted, with about a 19% chance of a July rate cut being predicted. Meanwhile, Brent crude witnessed a moderate recovery, and Asian stocks closed higher. The focus now turns to upcoming U.S. economic indicators, pondering their impact on global markets.

(With inputs from agencies.)