By Michael Msika, Bloomberg markets live reporter and strategist
Geopolitics poses numerous threats to markets, but investors are showing little willingness to turn risk-off.
The escalating Middle East conflict has so far not triggered a rush to safety, with consolidation instead remaining a strong theme for stocks. Volatility is creeping up, but is contained, seeing as there was no recent aggressive global push to build equity exposure. Fiscal stimulus and a dovish European Central Bank are among tailwinds still emboldening investors. Credit spreads haven’t reacted much to the rising tensions, pricing few hazards at the corporate level. Federal Reserve officials continue to forecast two rate cuts this year but last night signaled that higher prices are coming due to tariffs.
