From Oil to Indices: Multi-Asset Trading Opportunities as US-Iran Tensions Ease

Markets began the week on a positive note after reports emerged of a framework agreement between the United States and Iran that could pave the way for the reopening of the Strait of Hormuz and a reduction in geopolitical tensions across the Middle East.

According to initial reports, both countries have agreed to cease hostilities, with a formal signing ceremony reportedly scheduled for 19 June in Switzerland. Discussions surrounding sanctions relief and the release of frozen Iranian funds are expected to continue in the coming months.

For investors, the significance extends well beyond geopolitics. The Strait of Hormuz is one of the world’s most important energy corridors, handling approximately 20% of global oil and liquefied natural gas shipments before the conflict. Its disruption contributed to higher energy prices, increased transportation costs and inflationary pressures across global economies.

As expectations grow that shipping flows could gradually normalise, markets have started repricing the geopolitical risk premium that was built into various asset classes over recent months. From oil and precious metals to global stock indices and ETFs, a single geopolitical development is creating opportunities across multiple markets.

The easing of geopolitical tensions has triggered a broad market response:

• Oil prices have come under pressure as fears of prolonged supply disruptions ease.
• Equity markets and index futures have moved higher on improving investor sentiment.
• Gold and silver have seen some safe-haven demand moderate.
• Asian markets may benefit from stabilising trade routes and lower energy costs.
• Market volatility has eased as investors reassess risk across global markets.

For NOVA clients, these developments highlight the benefits of having access to multiple asset classes from a single trading platform. Rather than focusing on one market alone, investors can explore opportunities across indices, commodities and ETFs as market conditions evolve.

The S&P 500 stands to benefit from the de-escalation of geopolitical tensions and the subsequent decline in energy prices. Lower oil costs directly reduce operational expenses for major corporations and alleviate near-term inflationary pressures on consumers, boosting broader corporate margins. While Chair Warsh’s hawkish stance may imply that interest rates remain steady through the end of 2026, the reduction of systemic geopolitical risk provides a supportive backdrop for US equities.

Investors looking to gain exposure may consider:

Futures

• E-mini S&P 500 Futures (ES)
• Micro E-mini S&P 500 Futures (MES)

ETFs

• SPDR S&P 500 ETF Trust (SPY)
• iShares Core S&P 500 ETF (IVV)
• Vanguard S&P 500 ETF (VOO)

The Singapore market responds favorably to the stabilization of global shipping routes, given its position as a major maritime hub. The STI trades around the 5,025.80 level, supported by returning confidence in international trade and local banking stability. Reduced global inflation risks allow regional markets to stabilize, though a potentially stronger US dollar under a rules-based Fed could influence capital flows across broader Asian equities.

Investors may consider:

Futures

• SGX STI Futures (ST)
• SGX MSCI Singapore Index Futures (SGP)

ETFs

• SPDR Straits Times Index ETF (SGX: ES3)
• AMOVA AM Singapore STI ETF (SGX: G3B)

The Nikkei 225 may respond positively to the easing of geopolitical tensions and the anticipated reopening of the Strait of Hormuz. Japan is a major importer of crude oil and liquefied natural gas, making lower energy prices particularly relevant for corporate profitability and domestic inflation.

Reduced fuel and transportation costs could ease pressure on manufacturers, exporters, and consumer-facing businesses. A more stable global trade environment may also support sentiment toward Japanese equities, although investors will continue to monitor the trajectory of the Japanese yen and monetary policy developments from the Bank of Japan.

Futures

• SGX Nikkei 225 Futures
• CME Nikkei 225 Futures
• Osaka Exchange Nikkei 225 Futures

ETFs

• iShares MSCI Japan ETF (EWJ)
• NEXT FUNDS Nikkei 225 ETF (1321)

Gold trades near 4,218 USD per ounce, experiencing a slight consolidation as safe-haven demand softens due to the Middle East peace framework. However, the downside may be limited. Institutional investors continue to hold gold as a long-term hedge against structural service-sector inflation, which remains elevated at 4.2 percent in the US, and as a diversifier against continuing policy shifts under the new Federal Reserve leadership.

Futures

• COMEX Gold Futures (GC)
• Micro Gold Futures (MGC)

ETFs

• SPDR Gold Shares (GLD)
• LionGlobal Singapore Physical Gold ETF (GLS)

Silver may experience mixed reactions following the announcement of the US-Iran peace agreement. As geopolitical tensions ease, some safe-haven demand could moderate in the near term. However, silver’s dual role as both a precious metal and an industrial commodity means that improving economic sentiment and expectations for stronger manufacturing activity may continue to support demand.

Investors will also monitor inflation trends, central bank policy developments, and industrial consumption from sectors such as electronics, solar energy, and electric vehicles.

Futures

• COMEX Silver Futures (SI)
• 1,000 oz Silver Futures (SIL)
• COMEX 100-Ounce Silver Futures (SIC)

ETFs

• iShares Silver Trust (SLV)

Among all major asset classes, crude oil may see the most immediate impact.

The anticipated reopening of the Strait of Hormuz and normalisation of shipping routes could significantly reduce the geopolitical risk premium that has been supporting oil prices. As supply concerns ease, markets may continue to reassess the outlook for crude.

While lower oil prices may present challenges for energy producers, they could benefit transportation companies, manufacturers and consumers through reduced fuel costs.

Futures

• NYMEX Crude Oil Futures (CL)
• Micro WTI Crude Oil Futures (MCL)

ETFs

• United States Oil Fund (USO)