The dominant macro driver is the accelerating collapse in crude oil prices, with Brent settling at $73.74/bbl — a decline of 4.33% on Wednesday and the lowest level since before the US and Israeli airstrikes on Iran in late February — as crude begins flowing through the Strait of Hormuz even ahead of any formal peace declaration. JPMorgan's Natasha Kaneva has cut her year-end 2026 Brent forecast to $64/bbl, a move that is compressing inflation expectations and dragging US 2-year yields down 8bp to 4.16%, while gold shed 3.38% to $3,990.30/oz and silver collapsed 6.40% — signalling a broad unwind of the geopolitical risk premium that had built across commodity markets since February. Cross-asset, the VIX fell 4.41% to 18.63, reflecting an easing of acute stress, though the Fed's hawkish June pivot — with nine of eighteen FOMC officials now projecting at least one further 25bp hike and the median 2026 fed funds rate rising to 3.8% — keeps the policy backdrop restrictive.

For European investors, the oil collapse is a double-edged development: it provides relief to energy-intensive industries and household real incomes across the continent, but it has hit European Energy and Mining stocks hard — Eni fell 3.28% and ArcelorMittal dropped 2.90% in Wednesday's session. The EUR/USD slipped 0.41% to 1.138 and GBP/USD fell 0.35% to 1.320, with dollar strength driven by the DXY rising 0.20% to 101.61 reflecting residual Fed hawkishness, while EUR/CHF fell 0.31% to 0.9213 as the franc attracted safe-haven flows. German Bund yields bucked the global rally, rising 4.6bp to 3.05% on the 10-year, suggesting fiscal or inflation concerns specific to the euro area are not fully resolved — keeping pressure on rate-sensitive European sectors including Banks, which fell 1.13% as a sector, and Real Estate.