Good morning. The United States, Israel and Iran are embroiled in conflict and financial markets seem totally fine with it. Today, we’ll look at the geopolitical fallout from the weekend’s strikes on nuclear sites in Iran, which did not freak out investors in the slightest. In fact, stocks are pushing record highs globally. More on that below. But first:

Trade: As trade talks with Washington continue, the head of Canada’s largest private-sector union says the country must not agree to any deal that includes tariffs on automobiles.

Health Care: Toronto health care startup League Inc. is clicking after two strategic pivots.

Taxes: A new online chat offered by the Canada Revenue Agency has become another cause of frustration for Canadians reaching out to the CRA.

Today: Statistics Canada inflation data for May is expected to show that price pressures ticked up as a result of tariff impacts.

Also today: Federal Reserve Chair Jerome Powell delivers the semi-annual Monetary Policy Report to Congress.

Notable earnings include BlackBerry Ltd.

In moments of crisis, emotions tend to run high in the stock market. The typical investor reaction to unforeseen trouble is to catastrophize and run for the exits. So it’s a little curious to see stocks humming along, entirely unfazed by increased conflict in the Middle East.

If you’re a bit behind, the U.S. took a big gamble in bombing key nuclear production sites in Iran on the weekend.

Russia and China, which support Iran, either militarily or economically, warned that the strikes could drag the world into a broader conflict. Iran has already retaliated with attacks on U.S. bases in the region.

By Tuesday morning, both Israel and Iran said they had agreed to U.S. President Donald Trump’s ceasefire proposal. But the agreement appeared to be shaky with Israel accusing Iran of firing more missiles, which Iran denied.

From an economic point of view, the big risks revolve around the oil market. Iran controls the northern side of the Strait of Hormuz – possibly the world’s most important shipping lane for crude oil. Around one-quarter of the world’s seaborne oil passes through there.

And yet, the risk of Iran closing such a vital artery has not sent crude prices racing to the US$100-per-barrel mark. West Texas Intermediate – the main benchmark for U.S. oil – actually fell on Monday, to less than US$70 a barrel.

The stock market was equally indifferent. U.S. equities were up on the day by around 1 per cent – a decent showing even in the absence of a broadening regional war.

This is how it’s been in the financial markets the past couple of months. Steady gains even as the real world seems to become more fractured and dangerous. Here’s a short list of national stock markets that have recently hit record highs: Canada, Greece, Ireland, Italy, Spain, South Africa, Egypt, Mexico, Brazil, Chile and Peru. Even Israel – and it’s fighting a war on at least two fronts.

There are some legitimate reasons for investors to brush off these new tensions. Contained attacks and regional fighting do not tend to be economically significant for the world. The stock market has a long history of largely ignoring geopolitical flare-ups, from the Suez Crisis in 1956 to the drone attack on Saudi Arabia’s oil facilities in 2019.

Where this conflict could morph into an economic shock is through oil prices. But traders are betting that Iran won’t do something so drastic as choke off the Strait of Hormuz, which would be an act of economic self-sabotage. Iran’s own oil exports, which are mostly bound for China, would be disrupted. And Iran cannot afford, either economically or diplomatically, to upset its main benefactor.

“Ultimately, our take is that mutually assured economic destruction doesn’t appear likely,” Daniel Ghali, director, commodities strategy, for TD Securities, told The Globe.

Rational self-interest seems to be holding everything together for the time being. Investors are betting pretty heavily that it stays that way.

The Big Tech hangover has officially worn off. Back in the spring, a global selloff pounded tech stocks and took the steam out of artificial intelligence frenzy. But AI is hot again, as evidenced by a 30-per-cent jump in the Magnificent Seven group of stocks since April.