The markets, however, are unbothered. The price of Brent Crude barely moved this morning on the news, and now sits at $68 per barrel, below where it was when the U.S. launched an air raid on Iran’s nuclear facility. S&P futures were up nearly 1% this morning, premarket.

All the major Asian indexes rose this morning and the Stoxx Europe 600 was up a strong 1.3% in early trading. Even the VIX fear index has become inured to the conflict—it’s down 13% this morning.

Why are investors unconcerned about what was, just a few days ago, widely regarded as the potential beginning of World War 3?

Because in the day since Iran threatened to close the Strait of Hormuz, everyone has figured out that that scenario is extremely unlikely to happen and that Iran’s options for attacking Israel or anyone else are extremely slim. 

Its kabuki-show attack on the U.S. air base in Qatar is an example of that: Iran alerted the White House that the attack was incoming, the scale of the barrage was minimal, and Qatar is actually an ally of Iran.

The euro had been weakening based on the notion that Europe would suffer more from any oil shortages in the Middle East. But that now seems to be off the table, according to Convera’s Antonio Ruggiero, and the EU currency is bouncing back.

“Just like that, the geopolitical drag on the euro seems to have evaporated. EUR/USD has broken decisively above the $1.1620 zone at the time of writing, as markets shake off lingering conflict concerns. The rally began yesterday, fueled by skepticism that tensions would escalate further. Iran’s retaliatory strike on an American air base in Qatar was widely seen as symbolic—’a very weak’ response, as Trump described it—with ample advance warning,” he told clients.

This war is mostly for show at this point, in other words, and investors are returning to fundamentals rather than politics.

On that subject, U.S. Federal Reserve Chair Jerome Powell will testify to Congress today—his remarks will be closely parsed by equity holders for clues as to when he might lower interest rates (more cheap money is usually a tailwind for stocks).

“There were some moderately dovish comments from members of the US Federal Reserve, which should support financial markets,” UBS analyst Paul Donovan told clients this morning. “The suggestion was that rates could be cut over the summer, and could come down while inflation rose.”

Here’s a snapshot of the action prior to the opening bell in New York:

• S&P futures were up 0.91% at one point this morning despite news that last night’s ceasefire agreement between Iran and Israel appears to have been almost immediately broken with more missile attacks.
• The S&P 500 index closed up 0.96% yesterday. 
• Brent crude declined to $68 per barrel this morning.
• Stoxx Europe 600 was up 1.3% in early trading.
• South Korea’s Kospi was up 2.96% this morning.
• Hong Kong’s Hang Seng was up 2%.
• China’s CSI 300 was up 1.2%.
• Japan’s Nikkei 225 was up 1.14%.
• The VIX fear index retreated more than 10%.