Global financial markets are trading on headline risk Friday morning after Axios reported a "breakthrough" in US-Iran negotiations. The report, which was later tempered by Vice President Vance saying the administration is not yet ready to approve a deal, sent macro assets on a volatile ride.

WTI crude futures dropped 1.9% to $87.22 a barrel, reversing overnight gains driven by Iranian missile strikes on a US base in Kuwait. The dollar edged lower, with the DXY index steady at 99.11 and EUR/USD trading at 1.1644.

What's happening in bonds?

Treasury yields ticked lower across the curve. The 10-year yield fell to 4.455% from 4.481% yesterday, the 30-year slipped from 5.011% to 4.985%, and the 5-year is at 4.16%. The curve remains positively sloped — a sign that markets aren't pricing a near-term recession but are reducing their geopolitical risk premium.

Bond demand rose in parallel with gold, a pattern that often emerges when geopolitical uncertainty coincides with rate-cut expectations.

Equities: New highs in sight?

The S&P 500 is approaching all-time highs. SPY trades at $754.60, up 0.55%, with this week's high at $755.15. Small caps (IWM) gained 0.57% to $292, and emerging markets (EEM) added 0.32%.

The VIX ticked up slightly to 15.85 — still a relatively low level suggesting contained volatility. The direction is positive but tentative.

The shekel on the global stage

The Israeli shekel continues to strengthen: USD/ILS fell 0.64% to 2.8018, near its 52-week low of 2.7987. EUR/ILS dropped 0.8% to 3.259, and GBP/ILS fell to 3.7578. The global dollar weakness combined with relative economic stability in Israel is supporting the shekel, though the Bank of Israel will be watching inflation data closely for its next rate decision.

Commodities

Gold rose 0.75% to $4,566.60 per ounce, near historic highs. A weaker dollar, lower bond yields, and geopolitical optimism — all supportive for the yellow metal. Silver held steady near $75.9, while natural gas gained 1.19% to $3.324 per MMBtu.

The week ahead

Key macro data next week: the US ISM Manufacturing PMI, the May Non-Farm Payrolls report, and the ECB's rate decision. In Israel, April inflation data and the upcoming Bank of Israel rate decision will be in focus.

Bottom line

Macro is being driven by a single story today: the reported progress in US-Iran talks. Oil is selling off sharply, financial markets see it as a positive signal — stocks up, yields down, gold at highs. But with US officials yet to confirm a deal, markets remain vulnerable to "buy the rumor, sell the fact" dynamics.