Tonight, a startling scene unfolded.

Global markets presented a surprising turn on Thursday, as bad news began to lose its effect:
Gold prices stabilized, U.S. stock futures rose, and China's A-share market staged a comeback. Meanwhile, the dollar, oil prices, and U.S. bond yields all edged lower. Despite escalating conflict in the Middle East, markets moved in the opposite direction from what intuition would suggest.

This market movement is not entirely "without logic":

First, the combination of "escalating war, risk assets rallying" usually does not mean the market is ignoring risk—it suggests the market is judging whether the marginal impact of the shock has peaked. After new military actions, oil prices did not spiral out of control, while U.S. bond yields and the dollar retreated instead. For now, the market has tentatively chosen a judgment: military conflict is still escalating, but the financial shock may have approached a temporary peak. However, whether this judgment can hold requires three conditions: U.S. crude oil returning to and staying below $75, the 10-year U.S. Treasury yield staying away from 4.60%, and the dollar index not resuming a sustained strengthening trend.

Second, oil prices failed to hold at high levels, cutting off the risk transmission chain. The market's biggest fear was a chain reaction: conflict escalation → oil prices breaking $75 → rising inflation expectations → the 10-year U.S. Treasury yield breaking 4.60% → dollar strengthening → gold and stocks continuing to decline.

Third, the market was in an extremely fragile balance on Thursday, and the biggest variable for Friday is "weekend risk." In past conflicts, new news often emerged over the weekend, and this time the market has realized that ceasefire agreements are unreliable. Therefore, as the European and U.S. session draws to a close, crude oil may gain a weekend risk premium. Equity bulls may reduce positions, especially in sectors like aviation, consumer goods, and cyclicals.

The real surprise on Thursday was not that risk assets rose, but that bad news began to lose its ability to depress prices. However, this signal needs confirmation from Friday's close.