Yesterday, equity indices closed with another sharp drop. The S&P 500 fell by 1.74%, while the Nasdaq 100 dropped by 2.38%. The Dow Jones Industrial Average plunged by 1.01%.

However, the largest monthly decline in global equity markets since 2022 eased after the US granted Iran additional time to reach an agreement to end the month-long war. The pause is a 10-day reprieve during which Trump pledged not to strike Iran's energy infrastructure. That, however, proved insufficient to stabilize market conditions.

Asian equity markets pared initial losses to 0.4%, while futures on US and European stock indices edged higher. The MSCI All Country World Index continues to post its worst monthly performance in more than three years, as the Middle East conflict raises concerns about accelerating inflation and slowing economic growth.

Sentiment remains fragile. Part of the initial optimism weakened after reports surfaced that the Pentagon is considering sending up to 10,000 additional ground troops to the Middle East. The latest wave of sharp stock price swings is an appropriate reaction to that news. Traders are also closely monitoring the Strait of Hormuz, the key shipping route for Middle East oil flows, which remains effectively closed and is pushing oil prices higher and adding to inflationary pressure.

As throughout the week, Trump again said yesterday that negotiations with Iran are going very well. He also reiterated his pledge to refrain from strikes on the country's energy facilities, which provided a temporary lull for global energy markets shocked by the conflict. In response, Tehran set out a number of conditions for ending the conflict, one of which is a guarantee that the United States and Israel will not resume attacks.

Elsewhere, the US dollar index fell by 0.1% on Friday. The yen strengthened against the dollar after Finance Minister Satsuki Katayama said authorities could step in to counter currency volatility, including by taking decisive action. Bitcoin slid toward $69,000.

As for the technical picture of the S&P 500, the primary task for buyers today will be to overcome the nearest resistance level of $6,520. That would help the index gain upside momentum and could open the way for a rise to a new level at $6,537. Equally a priority for bulls will be control above $6,552, which would strengthen buyers' positions. In the event of a downside move amid reduced risk appetite, buyers must assert themselves around $6,505. A break below that level would quickly bring the trading instrument back down to $6,490 and open the path to $6,473.