Oil prices fell yesterday while stocks rallied in what may be attributed in part to month-end flows. But as we get into the new day, we’re still seeing equities hold steadier so far on the day. It may a more muted session with European markets closed, but US futures are holding the gains from yesterday as we look to the final stretch of the week.

S&P 500 futures are up 0.1% while Nasdaq futures are just marginally lower by 0.1% and Dow futures up 0.2% on the day. On the week itself, we’re still set for a more positive showing with the S&P 500 looking to secure a fifth straight week of gains.

And all of this is coming despite the US-Iran conflict continuing to drag on as talks remain stalled between the two sides. Adding to that, the Strait of Hormuz remains closed and is set to enter a tenth straight week of disruption. That is underpinning oil prices with Brent crude up 1% on the day to $111.50 and WTI crude up 0.5% on the day to $105.63. Both are set for roughly 11% gains on the week.

If this is what pessimism looks like, I can’t imagine the monstrous rally that will follow if and when US and Iran agrees to sit down and talk again next.

It is bewildering to see investors stick with the kind of run we’re seeing in the past few weeks when nothing has really changed on US-Iran developments.

The latest news is that Iran might send a revised peace proposal to the US later today as the ceasefire continues to hang in the balance. US president Trump did try and assure markets and the world audience that talks are advancing despite the stalled look, with only him and a “handful of others” knowing what is happening behind the scenes.

For now, it seems that markets are also taking his word for it. But in the meantime, the pressure continues to build for the global economy as higher energy prices weigh on households and look set to derail the inflation outlook.