Trump scraps Iran pact, oil spikes 8%, risk-off sweeps markets

Equity index futures slipped alongside the dollar's bid. The yen and Swiss franc gained as safe-haven flows rotated out of emerging-market currencies and commodity-bloc pairs. The euro gave back earlier gains against the greenback.

Trump's remarks mark a sharp reversal from the informal understanding that had kept diplomatic channels open. The administration had previously signaled willingness to negotiate on nuclear limits and regional influence. That door now appears closed.

The next catalyst is whether Iran responds with military action or a diplomatic overture. A tit-for-tat escalation would push Brent crude toward levels last seen during the 2019 Abqaiq attacks. A de-escalation, by contrast, would unwind most of the risk premium built into oil and rates since yesterday.

For now, the market is pricing the worst case. The 8% oil move is the largest single-session jump since the early days of the Russia-Ukraine war. Traders are watching for any statement from Iran's foreign ministry or the IAEA that could break the standoff.