Iran War Roils Global Markets, but US Stocks Prove Surprisingly Resilient

The Iran war has sent oil prices soaring more than 40%, pushed gold above $5,100, and hammered emerging-market equities, yet US stocks have barely flinched. As the conflict entered its third week on Friday, March 13, the S&P 500 sat at approximately 6,632, having declined roughly 2% since Operation Epic Fury began on February 28, a remarkably subdued response to what analysts are calling the most severe oil crisis in contemporary history [1].

Wall Street Rides Out the Storm

The resilience has perplexed observers. While Brent crude blasted through $100 per barrel, the S&P 500 spent the first two weeks of March fluctuating within about one percentage point of its year-start level [2]. On March 11, the index posted its best single-day gain in more than a month, climbing 0.8% after President Donald Trump signaled to CBS that the war was "very complete, pretty much" [2]. Oil prices briefly eased below $90 on the remarks before reversing course when Trump walked back the comments hours later, saying the conflict "wasn't about to end, it was ahead of schedule" [2].

"He cares about markets. He cares about, in particular, the stock market. It makes sense that he wants to calm fears," said Kristina Hooper, Chief Market Strategist at Man Group. She added a caveat: "Even if he says the war is over, Iran might keep fighting" [2].

The pattern echoes the April 2025 tariff episode, when markets rebounded sharply from an initial selloff and soon reached new peaks. Bank strategists broadly continue to project higher market valuations for 2026, and most traders appear to believe the market will power past the Iran conflict [1][2].

Winners and Losers Diverge Sharply

Beneath the headline indexes, sector performance reveals a deeply bifurcated market. Energy majors have surged as rising crude prices flow directly to the bottom line, while automakers and airlines reel from escalating fuel costs [3].

Oil refiners including Marathon Petroleum, Valero Energy, and HF Sinclair have been among the top performers since the onset of hostilities. Fertilizer and chemical producers such as CF Industries and The Mosaic Company have also rallied, given the Strait of Hormuz's critical role in global urea and phosphate shipments [3].

On the losing side, Ford shares have dropped 15% since the conflict began, and General Motors is off 8%, as rising energy prices threaten both production costs and consumer purchasing power [3]. Airlines and cruise lines have similarly declined under the weight of escalating fuel expenses.

Global Markets Tell a Darker Story

The US market's composure stands in stark contrast to the carnage abroad. The MSCI ACWI index of developed-market equities dropped roughly 4% from recent record highs by March 9, while the MSCI Emerging Markets index fell approximately 7%, an abrupt reversal after months of outperformance [5]. European and Asian bourses have been hit more severely, with Japan's Nikkei 225 falling 1.16% on March 13 alone and India's Sensex sliding 1.93% on the same day [1].

"The ongoing war in Iran is heightening fears that a drawn-out conflict could lead to sustained interruptions in oil supplies, resulting in increased gas prices for consumers and potentially escalating inflation," wrote Joe Rennison in the New York Times on March 13 [1].

Bond markets have also sold off as investors price in a higher inflation risk premium and scale back expectations for central bank easing [5]. MUFG noted in its March 9 FX Weekly that emerging-market currencies have taken significant hits, with the Hungarian forint declining 7.3% against the dollar, the South African rand falling 4.9%, and the Mexican peso losing 3.7% [5].

The Inflation Bind

The central tension for US equities is the oil-to-inflation transmission channel. With WTI nearing $100 per barrel, MUFG estimates the price surge could add at least one full percentage point to US headline CPI [5]. Federal Reserve officials have signaled an inclination to maintain elevated interest rates, and markets see no chance of a rate reduction at next week's meeting, with only about a 70% probability of any cut later in 2026 [1].

Michael Kantrowitz, Chief Investment Strategist at Piper Sandler, offered a sobering reminder: "The stock market doesn't solve consumers' problems. It doesn't solve many of our problems" [2]. US gas prices have risen nearly 20% since the war began, adding roughly 60 cents per gallon, and Q4 2025 GDP was revised lower to just 0.7% annualized, raising the specter of stagflation if oil remains above $90 to $100 per barrel [2][3].

For now, investors are betting that strong corporate earnings, particularly from the technology sector in Q1, and Trump's sensitivity to market declines will contain the damage. But as Padhraic Garvey, Head of Research at ING, put it: "Markets are coldhearted. They're not thinking about humanity necessarily. What matters is the aggregate" [2].

References

[1] https://www.nytimes.com/2026/03/13/business/us-stock-market-iran-war.html [2] https://www.nytimes.com/2026/03/11/business/economy/trump-iran-markets-economy.html [3] https://www.freep.com/story/money/business/2026/03/14/iran-war-related-oil-crisis-creates-some-market-winners-and-losers/89139658007/ [4] https://tradingeconomics.com/commodity/gold [5] https://www.mufgresearch.com/fx/fx-weekly-09-march-2026/