The BEAT: Navigating the Iran Conflict, From Oil Shocks to Market Impact

The Middle East conflict has lifted oil prices and inflation expectations, but the market reaction so far looks more like a price shock than a lasting valuation reset. Steep backwardation in the oil curve suggests supply remains tight, yet it also points to lower prices over time rather than a deep growth collapse.

U.S. equities have shown resilience because stronger earnings, fiscal support, deregulation, and AI-related investment continue to offset near-term geopolitical noise. That said, volatility is likely to stay elevated as peace talks continue and energy costs remain above pre-conflict levels.

The bigger risk is regional divergence: the U.S. enters this period with stronger consumers and more energy insulation, while Europe and parts of Asia face longer-lasting pressure from imported energy dependence. For investors, the dislocation may create opportunities to add back growth exposure at better entry points while staying disciplined on risk and diversification.