Markets on Edge Amid Rising Geopolitical Tensions

As we close out June, global markets are gripped by uncertainty following a dramatic escalation in Middle East conflict and continued instability in Europe. From rising oil prices to safe-haven surges, the geopolitical landscape is rapidly shaping financial conditions across the globe.

 Geopolitical Hotspots Driving Market Volatility

U.S.–Iran Tensions:
Last week’s U.S. airstrikes on key Iranian nuclear facilities have triggered a major response. Iran has increased its naval presence in the Strait of Hormuz and launched cyberattacks targeting U.S. infrastructure. The possibility of a full-blown conflict is now firmly on the radar.

Israel–Iran War:
Airstrikes and drone attacks continue to escalate, with heavy casualties reported on both sides. Calls for international mediation are growing, but so far, global powers remain divided.

Russia–Ukraine War:
While largely off the front pages, the war continues to weigh on energy and grain markets. Ukraine’s summer offensive has made limited progress, while global food supply chains remain vulnerable.

Oil at the Centre of the Storm

Crude Oil Surge:
Brent crude is now trading between $86 and $91 per barrel, up sharply from earlier this month. Analysts at Goldman Sachs warn that a full closure of the Strait of Hormuz could send prices soaring to $115–$130/barrel.

Shipping Risks:
Insurance premiums for tankers in the Gulf have doubled, reflecting the extreme risk premium being priced into oil markets.

Equities Wobble While Safe Havens Shine

Stock Markets Mixed:

• The S&P 500 fell 1.8% over the past week
• Tech and travel stocks lagged
• Energy and defence stocks surged

Safe-Haven Rally:

• Gold reached a 12-month high at $2,370/oz
• The U.S. dollar and Swiss franc gained ground
• Treasury yields declined as investors fled to safety

Fed Outlook:
With oil prices pushing inflation higher, the Federal Reserve may delay any expected rate cuts to late 2025. The central bank is caught between containing inflation and supporting slowing economic growth.

 Strategic Scenarios for Traders

Scenario 1: Controlled Escalation

• Oil stabilizes in the $80–85 range
• Equities recover slightly
• Fed resumes a dovish stance later in the year

Scenario 2: Full-Blown Conflict

• Oil spikes above $120/barrel
• Equities correct 10–15%
• Safe-havens and defence stocks soar

Scenario 3: Economic & Cyber Warfare

• Disruptions to energy, banking, or data infrastructure
• FX and commodity volatility intensifies
• Risk sentiment deteriorates sharply

 Macro View: What’s Next?

• Inflation may rebound on the back of energy prices, especially in transport and food.
• GDP growth forecasts are under review, particularly in Europe and Asia.
• Emerging markets with high oil import bills or weak currencies are likely to suffer capital outflows and higher borrowing costs.

 Final Thoughts

This is not a drill. The geopolitical landscape is shifting fast, and the impact on global markets is real and growing. At Propel Capital, we’re actively monitoring the situation and adjusting our strategies to stay ahead.

Whether you’re a day trader, swing trader, or macro investor—this is the time to stay informed, manage risk tightly, and remain adaptable.