After three consecutive sessions in the red, European markets rebounded strongly yesterday amid a sharp easing of oil prices. At the final bell, the CAC 40 - which had not gained more than 1% since February 20 - climbed 1.8%, while the DAX rose 2.2% and the Euro STOXX 50 gained more than 2.5%.

The recovery is already losing steam

Investors welcomed Donald Trump's statements that "the war was almost at an end," but these encouraging remarks now have less impact on the trend, especially since the U.S. President later clarified that the conflict would end soon, but not this week.

After suffering a historic drop of more than 11% yesterday, its sharpest single-session decline since March 2022, Brent is stabilizing around 87.7 dollars this morning. This still reflects a "risk premium" of about 20% compared to levels prior to the strikes against Iran.

As a result, uncertainties related to the duration of the clashes, their implications for growth and inflation due to rising commodity prices, and the monetary policies of central banks are once again dominating trade.

"Let's not kid ourselves: in reality, de-escalation is still a long time coming," commented Michael Brown, strategist at Pepperstone, this morning.

"We are still seeing no significant recovery in traffic through the Strait of Hormuz," the analyst observed. "Yesterday's rumors regarding a Navy escort for tankers were quickly dampened, and even more worryingly, U.S. intelligence reports that Iran is currently laying mines in the area," he continued.

"If this is confirmed, it is a real 'game changer' in the worst sense of the term, as it would make any attempt to reopen the strait infinitely more complex and risky," the strategist concluded.

The momentum fades: geopolitics takes over again

Wall Street experienced a volatile session on Tuesday, alternating between phases of gains and losses, to finish in the red, with the Dow Jones Industrial Average shedding 0.1% and the S&P 500 dropping 0.2%.

However, futures on major U.S. indices suggest a higher opening for Wall Street this Wednesday following the strong results published after the close by enterprise software designer Oracle.

The American group unveiled performance exceeding expectations, driven by strong demand for its cloud computing services related to artificial intelligence. In the third quarter, the company recorded revenue of 17.19 billion dollars, surpassing the average analyst estimate set at 16.91 billion.

Following this publication, shares of the Austin-based group rose by more than 11% in after-hours trading.

This outlook explained the relatively positive outcome of today's session in Asia, where the Nikkei advanced 1.4% in Tokyo by the end of the day.

Furthermore, volatility remains significantly higher than its levels of recent months and is struggling to normalize: in New York, the VIX index remains above 22, exceeding the level of 20 that signals market stress. Its Euro STOXX equivalent also remains high, above 25.

While some intermediaries are beginning to advise taking advantage of the recent bout of weakness to position in discounted stocks, such as Deutsche Bank, others are advising market participants to remain cautious to avoid being trapped by a new market reversal.

"It is rarely easy to see clearly through geopolitical events, as the current U.S. administration seems to adopt uncertainty as a negotiation strategy," noted the teams at Janus Henderson.

"What we can take away from the events of the last few days is that the conflict could last longer than many had initially hoped," the asset manager added.

"This means the economic impact could be greater, and markets have reacted by pricing this development into their valuations," it explained.

In this regard, the market will be particularly attentive at 1:30 PM to the publication of the latest U.S. inflation figures, seen as relatively stable in February at around 2.5% year-on-year, but expected to recover sharply in March following the recent rebound in energy prices.

Also highly anticipated, the PCE price index, the Fed's preferred measure of inflation, will be published on Friday.