March Madness

Markets are navigating the Gulf conflict with more resilience than many expected, reflecting a growing consensus that a gradual de-escalation remains the most likely path. While the effective closure of the Strait of Hormuz has tightened energy markets and lifted risk premiums, lower global oil intensity and intact core production capacity have helped contain both growth and inflation risks so far. The economic impact is uneven, with energy-importing regions such as Europe, China, India and Japan more exposed than a largely self-sufficient U.S., but current oil forward curves do not yet imply material demand destruction.

Geopolitical uncertainty will remain elevated, with ongoing negotiations, proxy risks and unresolved questions around Iran’s nuclear program keeping an enduring risk premium in energy prices. For investors and advisors, this backdrop argues for disciplined diversification and maintaining strategic allocations, using volatility-driven sell-offs as opportunities to build toward long-term targets rather than stepping to the sidelines.