How Wars Move Markets

Wars have always reshaped financial markets. From World War II's industrial boom to the Gulf War's oil shock, armed conflicts create winners and losers across every asset class. The pattern is remarkably consistent: defense contractors surge, energy prices spike, safe-haven assets attract capital, and consumer-facing sectors suffer as uncertainty suppresses spending.

The 2026 Iran War is following this playbook — but with modern twists. The conflict's proximity to the Strait of Hormuz (through which 20% of global oil flows) has amplified the energy shock, while the rise of sectors like cybersecurity and AI-driven defense adds new dimensions that didn't exist in prior conflicts.

Sectors Outperforming During the Conflict

Defense & Aerospace

The most direct beneficiaries of the conflict are defense contractors with exposure to missile systems, fighter jets, and munitions replenishment. Lockheed Martin (LMT) is up 26% YTD to $615.84, RTX is at $189.71 with Patriot interceptor demand surging, and Palantir (PLTR) is at $143.06 — up 59% over the past year on AI/intelligence contracts. However, the WSJ notes the war isn't moving defense stocks as expected — the market may have already priced in elevated spending.

The Pentagon's $200 billion supplemental budget request to Congress for war-related spending creates sustained demand well beyond the immediate conflict. President Trump has also ordered weapons production to be "quadrupled", signaling a multi-year commitment to defense manufacturing that benefits the entire supply chain — from prime contractors down to small-cap component makers.

Energy / Oil & Gas

Brent crude closed at $112.57/barrel on Day 29 (Mar 27) — the highest since July 2022. WTI hit $100.04 intraday before settling at $99.64, up over 50% since the war began. CNBC warns a new oil shock is building: the world has lost 4.5–5M bpd, and that number could double by mid-April. ~3,000 ships waiting at Hormuz (S&P Global), cargo volumes down ~50%, and Iran now demands sovereignty over the Strait as a condition to end the war. ExxonMobil and pipeline companies like Kinder Morgan remain among the clearest beneficiaries. In Canada, Suncor (SU) hit all-time highs at C$64.98 and Canadian Natural Resources (CNQ) is near ATH at ~$49.

Goldman Sachs raised its 2026 Brent average forecast by $8 to $85/barrel — implying prices will come down from current levels but remain elevated for the full year. For investors, this suggests the energy trade still has legs but the easy gains may be over; from here, prices will swing violently on every diplomatic development.

U.S. shale producers are in a particularly strong position: they benefit from elevated prices while being insulated from the physical risks facing Gulf-region producers. Every dollar increase in crude translates directly to improved margins for domestic producers who had already locked in lower breakeven costs.

Gold & Safe Havens

Gold initially rallied from $5,296 to ~$5,600/oz after strikes began, but has since pulled back sharply to $4,433/oz — down ~20% from its January all-time high of $5,589. FX Leaders sees $4,350 as a potential floor that could spark a rally back to $5,000. The pullback is unusual for a wartime environment and reflects a key tension: rising inflation expectations are pushing Fed tightening expectations higher, which historically pressures gold through rising real rates.

The US Dollar Index is up 2% since the war started, as global capital flows into dollar-denominated assets. This creates an atypical dynamic where gold's safe-haven bid competes with its sensitivity to real interest rates — potentially making current levels an attractive entry point if the conflict escalates further.

Solar & Cybersecurity

Goldman Sachs sees the war lifting sentiment on solar and cybersecurity stocks. The logic: energy security concerns accelerate the case for domestic renewable generation, while the cyber dimension of modern warfare (Iran has demonstrated significant cyber capabilities) benefits companies protecting critical infrastructure.

What Goldman Sachs Recommends

In their latest research note, Goldman Sachs highlighted several sectors they believe investors should overweight during the conflict:

• Healthcare — as a classic defensive sector that holds up during uncertainty
• Solar energy — benefiting from the energy security narrative
• Cybersecurity — direct beneficiary of both government spending and private-sector demand

Source: Investopedia — The Stocks Goldman Sachs Thinks You Should Own

CIO Top 5 Picks

A chief investment officer managing $13 billion in assets recently shared their top stock picks for the wartime environment, highlighting names including Palantir (PLTR) — benefiting from its defense and intelligence contracts — and Chevron (CVX), alongside other defense-sector plays.

Source: Business Insider — Top Stock Picks for the Iran War

What's at Risk

Not every sector benefits from wartime conditions. The following are under significant pressure:

• Airlines — Jet fuel costs have spiked alongside crude, crushing margins. Middle East route suspensions compound the damage.
• Shipping & Logistics — Rerouting around the Strait of Hormuz adds time and fuel costs to global supply chains.
• Consumer Discretionary — Rising energy costs act as a tax on consumers, reducing spending on non-essentials.
• Emerging Markets — A stronger US dollar makes dollar-denominated debt more expensive and reduces competitiveness for export-driven economies.
• Gulf-dependent supply chains — Any company reliant on shipping through or sourcing from the Persian Gulf faces elevated disruption risk.

Fertilizer & Agriculture

Fertilizer stocks are up 10–30% since the war began as petroleum-based fertilizer production faces disruption. Nutrien (NTR) is up 23.5% YTD to $75.49, with a $36.5 billion market cap and analyst Buy consensus. Mosaic (MOS) is up 9.2% YTD but has pulled back 5.5% in the past week after a challenging Q4 2025 report. The NYT reports the fertilizer crisis is worsening daily, threatening global food insecurity.

Uranium & Nuclear Energy

The energy security narrative is accelerating interest in nuclear power. Cameco (CCJ) trades at ~$117.79 with a Buy consensus and $123.92 target — up 140% over the past year. In Canada, NexGen Energy (NXE) at $12.36 is undergoing its final regulatory hearing for the Rook I uranium project in Saskatchewan, with conservative projections valuing it at $20–21/share — potential 60–70% upside on approval.

Canadian Markets

The TSX Energy Index rose 2.58% on Friday to 418.27, outperforming the broader TSX Composite which fell 0.3%. Canadian energy producers are direct beneficiaries: Suncor (SU) hit all-time highs at C$64.98 (analyst target $68.50), Canadian Natural Resources (CNQ) is near ATH at ~$49 (target $57), and Baytex Energy (BTE) led TSX energy gainers at +6.22% in March. Teck Resources (TECK.B) at C$66.86 (target C$76.33) offers copper/zinc exposure with an Anglo American merger pending.

Oversold Quality Names

The broad market sell-off has dragged down quality names alongside weaker companies, creating potential opportunities for long-term investors:

• Broadcom (AVGO) — Down ~25% from highs, RSI at 39 (oversold). AI/semiconductor leader (CNBC)
• Adobe (ADBE) — Trading at ~16x earnings, pessimistic for a highly profitable market leader (Morningstar)
• Intuit (INTU) — Down ~50% from 52-week high — extreme for a quality fintech name (Morningstar)
• Delta Air Lines (DAL) — Down 18% in March, P/E of 7.7 — war-punished but strong recovery candidate (Motley Fool)
• NexGen Energy (NXE) — At $12.36 vs. $20–21 target; Rook I approval pending (Investing.com)

The Contrarian Play

If you believe the war ends within 6–12 months and doesn't escalate into a broader regional conflict, the most beaten-down sectors — travel, consumer discretionary, and emerging markets — could represent value opportunities. History shows that markets tend to recover quickly once the shooting stops, and the stocks that fall the hardest often bounce the fastest. The risk, of course, is that the conflict drags on or widens.

Key Metrics to Watch

• Brent Crude Price — The single most important indicator. Closed at $112.57 (Day 29) — highest since July 2022. WTI briefly crossed $100. Goldman Sachs forecasts $85 average for 2026, implying eventual retreat.
• Strait of Hormuz — ~3,000 ships waiting. Iran demanding sovereignty recognition over the Strait. Houthis now entering the war — if they close Bab al-Mandeb (Red Sea), the shipping crisis doubles.
• Trump's Extended Deadline — Energy strike pause extended to ~April 5-6. Markets will price in escalation or de-escalation as that date approaches. Israel's nuclear strikes have undercut diplomatic momentum.
• Recession Odds — Moody's 48.6%, Wilmington Trust 45%, Goldman 30%. OECD: US inflation to 4.2%, GDP growth to 2.0%. These are the numbers that will determine whether the sell-off deepens.
• Gold Price — At $4,433/oz, down 20% from ATH. Unusual wartime pullback due to rate expectations. Watch $4,350 floor.
• VIX — At 31.05, well above the ~20 pre-war baseline. Sustained elevated fear.
• S&P 500 — Fifth straight losing week. Dow in correction territory. Nasdaq at longest weekly losing streak in 4 years.

Sources

• Forbes — These Companies Stand to Benefit From Trump's Iran War
• Motley Fool — Energy Stock Buying Strategies to Employ
• CNBC — Gold and the Iran Conflict: Where Next for Markets
• Business Insider — Gold Price Impact: Iran War Safe-Haven Trade
• Investopedia — The Stocks Goldman Sachs Thinks You Should Own
• Business Insider — Top Stock Picks for the Iran War