Yesterday, equity indices closed higher. The S&P 500 rose by 0.72%, while the Nasdaq 100 jumped by 1.16%. The Dow Jones Industrial Average strengthened by 0.48%.

However, this morning brought a very different picture. The market, sensing the arrival of new challenges, abruptly changed direction. Futures on key US indices plunged, signaling potential losses during the main trading session. At the same time, bond prices, traditionally seen as a safer asset, rose. This trend reversal followed statements by US President Donald Trump that fundamentally altered expectations for Middle East policy.

Instead of hints at de-escalation and a search for a peaceful settlement, Trump promised not to scale back military action against Iran but, on the contrary, to move to even more active bombing. Remarks about possible attacks on energy infrastructure were particularly alarming. That rhetoric, implying escalation, immediately hit market sentiment, triggering capital outflows from risk assets and a rotation into defensive instruments.

As recently as yesterday, the rally in the $31 trillion Treasury market stalled after economic data showed steady gains in employment and consumer spending, which reduced the prospect that the Iran war would end and thereby open the way to the Fed's interest rate cuts. At market close, Treasury yields were little changed after earlier intraday declines, when Brent briefly fell below $100 per barrel.

Today's Middle East developments will almost certainly drive a sharp rise in bond prices and a decline in yields.

In other markets, Brent crude jumped by 6.6% and approached $108 per barrel as the war effectively clamped down the Strait of Hormuz, a key transit artery for Middle East supplies, reducing available output. Gold plunged from about $4,800 to roughly $4,550 on expectations that the new escalation could force a reassessment of Fed monetary policy.

As for the technical picture of the S&P 500, the main task for buyers today will be to overcome the nearest resistance level of $6,490. That would help the index gain upside momentum and could pave the way for a thrust to $6,505. Equally a priority for bulls will be control above $6,520, which would strengthen buyers' positions. In the event of a downside move amid reduced risk appetite, buyers must assert themselves around $6,473. A break below that level would quickly push the instrument back to $6,457 and open the way to $6,441.