Markets opened the week in a cautious risk-on mood. US stock-index futures edged higher on Monday — with the S&P 500 and Nasdaq contracts modestly up — as the US-Iran ceasefire struck over the weekend held, Seeking Alpha reported. European markets were mixed to slightly higher, with investors keeping one eye on the Middle East. The tone was relief, not euphoria.

Oil tells the real story

The clearest signal is in crude. Brent and US West Texas Intermediate were little changed on the day, hovering around the low-$70s and roughly $70 respectively — but the striking move is over the past week and month: oil has fallen sharply, shedding most of the "war premium" it built up during the conflict, as shipping resumed through the Strait of Hormuz and supply fears eased. Crude is back near its lowest levels since before the latest escalation.

A war premium is the extra margin traders price into oil when they fear supply disruption. Its rapid unwind says the market now believes the worst-case — a blockade of Hormuz, through which a large share of the world's seaborne oil passes — has become less likely for now. That matters beyond energy: cheaper oil eases inflation pressure, removing one headwind for central banks. The caveat is plain — if the truce collapses, the premium can snap back just as fast.

The dollar caps a strong month

The other big mover is the US dollar, which is closing out its best month in nearly a year, as Boursel reported. The greenback has been lifted by safe-haven demand during the Middle East scare and by a hawkish Federal Reserve signaling — at its June meeting — that it may keep interest rates high, or even raise them, rather than cut. With inflation still above the Fed's 2% target, dollar assets that pay more interest have pulled in global money.

Why Thursday matters

The week's pivot point is the US June jobs report (nonfarm payrolls), due Thursday, July 2. Economists expect a slowdown from May's pace of job creation. The read-through is direct: a soft number would strengthen the case for the Fed to ease and could take some steam out of the dollar; a strong one would reinforce the higher-for-longer message. (Figures here are forecasts; the jobs print routinely moves stocks, bonds and the dollar.)

The bottom line

Three forces are pulling on markets at once: a fragile Middle East truce, a hawkish Fed, and the data that will test it. For now they net out to a tentative bid for risk and a firm dollar, with oil's retreat the most concrete sign that the geopolitical fever has broken — at least temporarily. None of it is settled: the ceasefire is untested, inflation is sticky, and Thursday's payrolls could reset the week's mood in a single line. The calm is real, but so is its fragility.