Markets brace as Iran diplomats travel to Islamabad

A delegation of Iranian diplomats, including Foreign Minister Ali Bagheri Araghchi, traveled to Islamabad this week to pursue discussions aimed at preparing a potential U.S.-Iran agreement. The visit follows several days of tense rhetoric and a prior Iranian warning to halt negotiations.

Officials expect the talks to run for an extended period, and they do not anticipate an immediate shift in the regional geopolitical picture. Delegates met with Pakistani hosts to advance diplomatic channels and to coordinate next steps among intermediaries.

Global markets showed caution ahead of and during the visit. Major U.S. stock indexes trimmed earlier gains as traders booked profits, though Amazon and Nvidia remained among the week's top performers. Oil futures fell into the week’s close. Cryptocurrencies continued to rebound after breaching technical resistance levels. Currency markets were relatively muted, with the U.S. dollar and crude oil watched closely; several European currencies recovered some ground after a quiet stretch.

U.S. macro data reflected recent commodity price moves. The Consumer Price Index rose 3.3% year over year; energy and food contributed a 0.7% increase to the monthly reading while core CPI advanced 0.2% month over month. Market participants noted the report broadly matched expectations. In Canada, employment increased by 14,100 and the unemployment rate edged down to 6.7%.

A Senate hearing for Kevin Warsh was delayed, a procedural change that could affect the timing of decisions on Federal Reserve leadership. Separately, sources reported signs of de-escalation between Israel and Hezbollah, with a possible ceasefire and formal talks expected by Tuesday.

Market participants highlighted the start of the IMF spring meetings in Washington as a potential focal point for comments on oil and the global outlook. With few major U.S. economic releases scheduled over the weekend, updates from Islamabad and statements at international gatherings are likely to drive risk sentiment.

Market analyst Elior Manier wrote, “Steady progress and positive communications will be required to maintain risk-sentiment at current, very positive levels.”