Markets on edge as fresh U.S.-Iran attacks dent optimism over a peace deal

Up until the weekend, global markets had been betting on a fragile ceasefire between the U.S. and Iran turning into a longer-term peace deal.

But escalatory rhetoric, action over the Strait of Hormuz, and fresh Iranian attacks on the United Arab Emirates over the past 48 hours, have led experts to warn war could be back.

Market analysts said the latest developments could mark an inflection point in the war and a critical moment for financial markets and global energy supplies, which are dwindling as the Strait of Hormuz remains largely closed.

“It’s an incredibly delicate moment,” Ben Powell, chief investment strategist for APAC at BlackRock, told CNBC Tuesday.

“It’s very unsettling to have our first missile warnings here in Abu Dhabi for several weeks. We were all hoping that was behind us,” the UAE-based strategist said.