A sector that was one of the US stock market's biggest winners this year has suffered a dramatic reversal as the Iran War triggered a spike in oil prices. Materials stocks have become the worst-hit sector since the conflict began, with industrial production costs surging across the board.

Before the war, materials companies had been riding a wave of economic recovery and infrastructure spending. The sector's strong performance reflected robust demand for everything from steel to chemicals. However, the conflict in Iran has sent oil prices soaring, creating a perfect storm for materials producers who rely heavily on energy for manufacturing and transportation.

Higher oil prices mean higher costs for plastics, fertilizers, and countless other materials that depend on petroleum-based inputs. Transportation costs have also climbed sharply, squeezing margins for companies that move raw materials and finished goods. This cost pressure comes at a particularly bad time, as many materials companies had been counting on continued economic growth to drive demand.