Key points:

• The latest U.S.-Iran talks ended without a deal, but a fragile ceasefire still  holds.

• The breakdown challenges some of the peace dividend that had started to build in markets, even if it does not yet revive the most extreme panic seen earlier in the cycle.

• Washington’s response has shifted from diplomacy to maritime pressure, with a blockade of the Strait of Hormuz aimed at Iranian shipping rather than an immediate return to direct military escalation.

• That keeps oil supported, risk sentiment fragile, and markets highly sensitive to headlines from Hormuz, Washington, Tehran, and Israel.

What happened

After a marathon round of negotiations in Islamabad, the United States and Iran failed to reach a deal. That was disappointing…