Does conflict in Iran change the international investment narrative?

International markets entered 2026 with strong momentum, led by a European recovery, robust Japanese equities and record highs in select emerging markets, particularly Korea. The recent bombing of Iran has disrupted this narrative, sparking a sharp global equity sell-off as investors reassess the risks of higher energy prices and renewed inflation. Much now hinges on how quickly Qatar’s LNG capacity returns and whether oil flows through the Strait of Hormuz remain stable for key Asian importers.

Despite near-term volatility, policymakers’ responses and the resilience of consumers will be critical in determining whether this shock proves temporary or more persistent. Underneath the geopolitical noise, improving European data, compelling AI-driven growth in Asia and supportive commodity dynamics in Latin America keep fundamentals broadly constructive for long-term international investors.