Global markets appear to be catching their breath. The Nasdaq jumped 1.29% on Wednesday in a tech-led rally, while the S&P 500 rose 0.78%, helped along by some upbeat macro prints.

A mix of factors seem to be fuelling this market breather. Traders seemed to take heart in the New York Times’ report yesterday that Iranian intelligence had indirectly reached out to the CIA after Saturday’s attacks to try to reach a resolution. Washington’s plan to help reopen the embattled Strait of Hormuz via navy escorts and insurance coverage may also have raised some optimism.

There was also some positive news on the labour market front ahead of Friday’s payrolls release. U.S. private payrolls printed a higher-than-expected rise for February. ISM's non-manufacturing PMI, meantime, hit a more than three-year high.

But uncertainty still reigns as the Middle East conflagration enters its sixth day and a swift resolution to a clogged-up Strait of Hormuz looks, for now, like a distant prospect.

Indeed, analysts have warned that Iran can keep up drone harassment in the narrow waterway for months, and it's far from clear that tankers would brave the strait even with U.S. naval and insurance support in place.

And other signs point towards this being more than a days-long conflict, as the U.S. Senate failed to block the administration’s campaign against Tehran, giving President Trump largely unbounded power to direct the war.

Oil marched higher on Thursday on the prospect of continued disruption. Both U.S. and Brent crude jumped over 2%, with the latter topping $83 per barrel.

Gold also edged up on safe-haven demand, and the dollar strengthened again after retreating from three-month highs.

Meantime, U.S. stock index futures edged lower ahead of the bell and U.S. Treasuries eased. Investors will have even more to chew on later today with the release of weekly jobless claims, ahead of tomorrow's non-farm payrolls.

Elsewhere, chip designer Broadcom on Wednesday reported a first-quarter revenue rise of 29% to $19.31 billion and projected its AI chip revenue would top $100 billion next year. It’s emerging as a strong competitor in the space as it signs deals to rival those of its dominant competitor Nvidia, including with Meta.

The energy price jolt from this week's Middle East shock has left Europe fretting about an economic hit akin to the invasion of Ukraine four years ago. But initial fears may be overdone if - and it's a big "if" - futures markets prove accurate.

As the weekend's attacks on Iran marked the start of a full-blown - now region-wide - war that could last several weeks at least, European markets shivered at the prospect of yet another brutal energy squeeze spurring inflation and sapping demand.

Surging oil prices hit markets of big importing economies ‌around the world. But Europe's particular exposure to renewed disruption of natural gas supplies - already severed when Russia invaded Ukraine in 2022 - is a potential double whammy.

Although below Tuesday's peaks, crude oil is still up more than 10% from last week and at its highest levels in more than a year. European natural gas futures are still more than 50% up on last Friday and also at levels seen over 12 months ago.

Graphics are produced by Reuters.