The eruption of direct military conflict between Israel and Iran on June 13, 2025, presented global financial markets with a severe geopolitical shock. Intuition suggests that such a significant escalation of hostilities in a critical region should trigger a sustained downturn in risk assets. However, the market's reaction proved to be far more complex and, on the surface, paradoxical. After an initial, sharp sell-off across global indices, U.S. stock futures—including the Dow Jones Industrial Average, S&P 500, and Nasdaq 100—rebounded and were trading in positive territory by the following Monday, June 16. This report provides an exhaustive, multi-layered explanation for this seemingly contradictory market behavior
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