Emerging-market assets rose as traders clung to hopes of last minute de-escalation of the Middle East conflict just hours before Donald Trump’s deadline on Iran was set to expire.

Emerging-market assets started the week with modest gains amid speculation that US President Donald Trump may back down from a threat to significantly escalate the war in Iran.

The Middle East war risks ending a run of net credit-rating upgrades across emerging markets and could trigger a new downgrade cycle as it fuels inflation and tightens financial conditions, S&P Global Ratings Director Ravi Bhatia said.

The Iran war has not just broken a decades-long relationship between crude oil and emerging-market currencies, it has pushed it into reverse, with their correlation turning the most negative in at least 27 years.

Most emerging-market currencies rebounded from earlier losses as the dollar and oil prices sank after US President Donald Trump signaled the Iran war could be ending soon.

Emerging-market local-currency bonds are becoming less sensitive to swings in US Treasuries as investors focus more on yield advantage.

JPMorgan Chase & Co. said it will remove the United Arab Emirates from its emerging-market bond indexes by June after the Middle Eastern nation exceeded the bank’s measures of wealth for three successive years.

Morgan Stanley Investment Management is adding to emerging-market bets that are insulated from the artificial intelligence boom as it positions for a potential pullback in the crowded tech trade, according to Deputy Chief Investment Officer Jitania Kandhari.

Morgan Stanley Investment Management is adding to emerging-market bets that are insulated from the artificial intelligence boom as it positions for a potential pullback in the crowded tech trade, according to Deputy Chief Investment Officer Jitania Kandhari.

Dubai stocks are off to their strongest start in 12 years as investors bet on the emirate’s resilient economy and look beyond volatile oil and artificial-intelligence trades.

Emerging-market assets were little changed on Tuesday as traders weighed the recent optimism toward the asset class against a firmer US dollar and thinner trading volumes due to holidays in major markets.

Emerging-market assets pared a monthly rally, falling for a second session after a massive selloff in metals and renewed dollar strength dampened risk appetite on Friday.

As a result of the sweeping rally across emerging markets, bonds prices are increasingly moving on their own accord, instead of in-line with the US.

Tensions between the US and Europe are  weighing on the dollar and driving a search for alternatives.

Investors are pouring cash into emerging-market funds at a record pace as momentum builds for a rotation out of US assets.

Global bond investors have turned the most optimistic on emerging markets in 13 years amid a rally driven by greater confidence in fiscal discipline and more money shifting away from the US.

Emerging markets are poised to start 2026 as a favored trade on Wall Street, with money managers betting a multi-year cycle of investment inflows is underway.

Investors are gravitating to dollar bonds to ride the rally in emerging-markets, and have poured the most money in two years into a fund tracking the asset class.

Goldman Sachs Group Inc. says the yuan is 25% undervalued and will appreciate more than forwards contracts are pricing for 2026.

Emerging-market currencies traded mixed on Thursday as investors weighed the prospect of lower interest rates against concerns the frenzy over artificial intelligence has gone too far.