Brent crude drifted closer to $95 a barrel on Wednesday as the Iran-Israel ceasefire held into its second week, while Wall Street futures pointed to fresh gains ahead of marquee tech earnings that traders hope will confirm a broader recovery from last month’s war shock.

The global benchmark traded at $95.80 in London midmorning, down 1.6 percent on the session and roughly 23 percent below the $125 peak reached in late March, when missile exchanges across the Persian Gulf and a brief closure of one Strait of Hormuz lane sent shippers scrambling for alternative routes. West Texas Intermediate slipped to $91.40. Both contracts have fallen for four straight sessions.

“The war premium is bleeding out faster than most desks expected,” said John Reilly, a commodities strategist at Citi. “OPEC+ delivered the barrels they promised on April 1, Saudi and Emirati flows are back to pre-crisis levels, and there is no sign that any of the ceasefire violations we’ve seen are going to derail the broader arrangement. The market is repricing for a world without a Gulf war.”

Reilly added that Citi now expects Brent to average $90 in the third quarter, down from a previous forecast of $102, citing the 1.5 million barrel-per-day production hike agreed at the emergency OPEC+ session in Vienna three weeks ago and a faster-than-anticipated restart of Iraqi southern fields.

European equities tracked the energy move higher. The Stoxx Europe 600 rose 0.7 percent in early trading, led by airlines and consumer cyclicals, while energy majors lagged as crude weakened. Lufthansa climbed 3.1 percent and Air France-KLM added 2.6 percent after both carriers said in trading updates that summer forward bookings had recovered to within 4 percent of pre-war levels. Frankfurt’s DAX hit a fresh six-week high.

In Asia, the Nikkei 225 closed up 1.2 percent and Hong Kong’s Hang Seng gained 0.9 percent, with shipping and insurance names leading after Lloyd’s of London lowered its surcharge on vessels transiting the Strait of Hormuz for the second time this month. The combined cut now stands at roughly 60 percent off the April 1 peak.

U.S. stock futures pointed to a higher open. S&P 500 e-minis were up 0.4 percent and Nasdaq-100 futures gained 0.6 percent ahead of after-hours earnings from Microsoft and Tesla, the first of the megacap reports that will shape sentiment for the rest of the week. Alphabet and Meta are scheduled for Thursday; Apple and Amazon report next week.

“Earnings season is going to do the heavy lifting from here,” said Priya Venkatesan, head of U.S. equity strategy at Jefferies. “Investors have largely accepted that the geopolitical tail risk has shrunk. The question now is whether enterprise AI spend held up through the quarter when CFOs were watching cable news and rerunning their cost models.”

The S&P 500 closed Tuesday at 5,184, recovering nearly all of the 4.3 percent drop it suffered in late March. The Nasdaq Composite, which had lagged on fears that the moratorium bill working its way through Congress would crimp data center buildout, is now within 2 percent of its February high. A House Ways and Means vote on that legislation is expected later Wednesday and has been overshadowed in equity trading by the energy and earnings narrative.

The dollar slipped against a basket of major currencies as risk appetite returned. The euro traded at $1.094, up 0.3 percent, and the yen firmed to 149.20 per dollar after the Bank of Japan governor told reporters in Tokyo that policy normalization could resume “once external conditions allow.” Gold, which had touched $2,790 an ounce at the height of the war, fell to $2,612, its lowest level since mid-February.

Treasury yields ticked higher as safe-haven demand eased. The 10-year note yielded 4.18 percent, up three basis points, while the two-year held at 4.05 percent. Fed funds futures now imply roughly a 55 percent probability of a quarter-point cut at the June 17 Federal Open Market Committee meeting, up from 32 percent a week ago, as traders reassessed the inflation outlook with energy prices unwinding.

“If Brent is going to settle in the low nineties, the inflation arithmetic for the second half changes meaningfully,” said Mark Holloway, chief economist at Barclays. “We had been carrying a headline CPI assumption near 3.4 percent for the third quarter. We’re now looking at something closer to 2.8 percent if the current trajectory holds.”

Not all sectors are participating in the rally. Defense contractors, which surged through March on emergency Pentagon orders, have given back roughly 8 percent of those gains over the past five sessions. Lockheed Martin slipped 1.4 percent in premarket trading after a Morgan Stanley note suggested the replenishment cycle for Patriot and THAAD interceptors would compress timelines but not raise total contract values materially. Raytheon and Northrop Grumman also traded lower.

Emerging market currencies broadly strengthened. The Turkish lira, which had weakened sharply during the conflict on fears of a regional refugee surge, recovered 1.8 percent against the dollar over the past week. The Indian rupee firmed to 82.40 as oil import costs receded.

Analysts cautioned that the ceasefire remains fragile and that a single significant violation could quickly reverse this week’s moves. UN observers reported one rocket fired from southern Iraq toward Kuwaiti airspace overnight, intercepted without damage, the fourth such incident since the truce took effect April 15.

“Markets are pricing this like a done deal, and it isn’t yet,” Venkatesan said. “But you can see the institutional flow. People are putting money back to work.”

Traders said the next major catalyst would be Friday’s preliminary purchasing managers’ index readings from the eurozone and the United States, which will offer the first hard data on business activity since the ceasefire was announced. Officials at the European Central Bank said earlier this week that the bank’s June assessment would weigh the energy unwind heavily.