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, Raytheon (RTX), and Boeing have all seen significant gains since operations began — RTX is up 14% year-to-date.

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 28 — the highest since 2022. Israel struck two nuclear facilities (Yazd yellowcake facility, Arak heavy water reactor) and two major steel plants despite Trump's 10-day energy strike pause. Iran's FM Araghchi vowed "heavy" retaliation. Oil remains volatile between $99–$114, with ~3,000 ships waiting at Hormuz (S&P Global) and cargo volumes down ~50%. Iran formalizing "toll booth" transit regime. ExxonMobil and pipeline companies like Kinder Morgan remain among the clearest beneficiaries.

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 has performed as expected in a wartime environment, rallying from $5,296 to ~$5,600/oz after strikes began — a move that analysts attribute directly to conflict-driven safe-haven demand. Monday's oil crash and diplomatic signals briefly pressured gold, but it rebounded as Iran denied talks. If the conflict intensifies or expands, forecasters see gold reaching $5,500–$6,000.

The US Dollar Index is up 2% since the war started, as global capital flows into dollar-denominated assets. However, gold is facing an unusual headwind: rising inflation expectations (driven by energy costs) could push the Fed toward tighter policy, which historically pressures gold. This creates an atypical dynamic where gold's safe-haven bid competes with its sensitivity to real interest rates.

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.

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 of the war's economic impact. Currently ~$111/barrel (Day 28 high), swinging violently between $99–$114 on every diplomatic signal. Goldman Sachs forecasts $85 average for 2026.
• Strait of Hormuz Shipping Traffic — Any further disruption sends shockwaves through global energy markets. Iran's Defense Council now says "non-belligerent" countries can transit with coordination — watch if this holds.
• Trump's 5-Day Deadline — The postponed power plant strike ultimatum expires ~March 27-28. Markets will price in escalation or de-escalation as that date approaches.
• US Dollar Index (DXY) — Tracks safe-haven flows and has implications for emerging markets and multinational earnings.
• Gold Price — The classic fear gauge. Currently ~$5,600/oz, near all-time highs.
• 30-Day Oil Volatility — At highest levels since April 2022 for both Brent and WTI. Expect violent swings to continue.
• VIX (CBOE Volatility Index) — The "fear index" measures expected market volatility. Elevated VIX = elevated uncertainty.

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