Geopolitical tensions in the Middle East have flared up again recently, sparking a wave of volatility across global markets. In a notable development, Iran launched missile strikes targeting U.S. military bases in Qatar and Iraq. While this initially raised fears of a broader conflict, the market’s actual response was surprising: oil prices fell sharply, and global equities staged a strong rebound.

According to many analysts, Iran’s retaliation appears to have been deliberately measured and symbolic. Reports suggest the missiles were carefully aimed to avoid civilian areas and key energy infrastructure in Qatar, and the scale of the strike was calibrated to roughly match the previous U.S. airstrikes on Iranian nuclear facilities. This suggested that Iran was signaling resolve without pushing the situation toward a full-scale war—balancing domestic pressure for a response with a clear intent to avoid escalation.

Before the incident, markets were nervously watching the Strait of Hormuz, through which roughly 20% of the world’s crude oil passes daily. Any disruption there could have sent energy prices soaring. In fact, Brent crude jumped over $10 per barrel in the first half of June on such fears. But once Iran’s response proved restrained, confidence quickly returned and oil prices reversed course.

On Monday afternoon, Brent crude tumbled more than $5 in a single session, briefly dipping below $70 per barrel. That sharp decline reflects how quickly the so-called “risk premium” from geopolitical uncertainty is being priced out. As long as oilfields and shipping lanes remain operational and undamaged, markets see little reason for elevated prices.

President Trump also took to social media to comment on the situation, expressing concern over energy prices while pledging to closely monitor developments in the sector. This helped reassure investors further.

With geopolitical risk easing and oil prices pulling back, equity markets responded with broad gains. Shares in both the U.S. and Asia rallied, reflecting renewed optimism. Lower energy costs could ease inflationary pressure and give central banks more flexibility with monetary policy—a welcomed development for markets that have been jittery over interest rate paths.

Looking ahead, the Middle East situation remains fluid, but it’s clear that key players are actively working to manage and contain the tensions. As long as escalation is avoided, oil prices may stabilize within a reasonable range and the recent momentum in equities could carry forward.

Still, uncertainty is part of the landscape. Investors should stay attuned to global political and economic shifts, and consider adjusting their portfolios to enhance resilience. While the current market rebound is encouraging, robust risk management remains essential.