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Markets Slip as Investors Bet on Extended U.S.–Iran Ceasefire

  Stocks Edge Lower as Investors Hope U.S.–Iran Ceasefire Will Hold Stocks drifted lower today as markets balanced cautious optimism over a potential extension of the U.S.–Iran ceasefire with persistent geopolitical and inflation concerns. Recent trading sessions have shown that even modest signs of diplomatic progress can meaningfully shift investor sentiment. Asian and U.S. markets rallied earlier this week on hopes that Washington and Tehran would continue negotiations, helping unwind some of the war-driven risk premiums that had pushed oil and volatility higher. Despite the pullback, investors remain hopeful that the ceasefire—currently set to expire soon—will be extended, giving negotiators more time to work toward a longer-term agreement. Reports indicate both sides are considering adding another two weeks to the pause, a move that has already helped push Brent crude below the recent peak of nearly US$120 per barrel. Lower oil prices have eased pressure on inflation expecta...
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Saudi-Israel Normalization Remains Uncertain Amid Trump's Investment Push

As former U.S. President Donald Trump arrives in Riyadh, the prospect of Saudi-Israel normalization remains elusive despite his ambitious push for a $1-trillion investment deal. The ongoing war in Gaza has complicated diplomatic efforts, with Saudi Arabia insisting on an immediate ceasefire as a prerequisite for resuming normalization talks.

Trump’s Middle East envoy, Steve Witkoff, has expressed optimism about expanding the Abraham Accords, which previously facilitated diplomatic ties between Israel and several Arab nations. However, Israeli Prime Minister Benjamin Netanyahu’s reluctance to halt the war or support a Palestinian state has stalled progress on similar agreements with Riyadh.

Saudi Arabia, a key player in Middle Eastern geopolitics, does not formally recognize Israel. While normalization could enhance regional stability and counter Iran’s influence, the issue has become increasingly sensitive due to the Gaza conflict. Crown Prince Mohammed bin Salman has reportedly prioritized ending the war and establishing a credible path to Palestinian statehood before reconsidering normalization efforts.

For now, Trump’s visit is expected to focus on economic partnerships, including major arms deals, artificial intelligence projects, and infrastructure investments. His administration aims to secure a substantial financial commitment from Saudi Arabia, building on an initial $600-billion pledge. While diplomatic breakthroughs remain uncertain, the trip underscores Washington’s strategic interests in the region.

As the situation unfolds, the world watches to see whether economic incentives can pave the way for renewed diplomatic engagement between Saudi Arabia and Israel.

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