Public Markets 3 Days

Last updated: March 28, 2026, 8:30 AM ET

Geopolitical Shocks & Market Contagion

The escalating conflict in the Middle East, centered on Iran, continues to rattle global asset prices, forcing the economic elite to contemplate a future defined by perpetual shocks. The war has driven oil prices sharply higher, with futures jumping to $114 following warnings that the conflict could stretch for weeks, simultaneously dragging the S&P 500 down for a fifth consecutive week and pushing the Dow and Nasdaq into correction territory. Developing economies face the hardest impact, as they are disproportionately reliant on energy imports, a strain evident in rising inflation risks that are hampering bond markets across Southeast Asia. For example, Pakistan secured initial IMF approval for $1.2 billion of its bailout program, partly due to geopolitical risks, while Mozambique’s dollar bonds extended their selloff for a tenth day as the oil shock worsened its existing financial crisis.

The direct military actions and resulting instability are forcing immediate economic adjustments globally. The Houthis entered the monthlong conflict by launching ballistic missiles at Israel, leading to severe disruption in transit routes, exemplified by two more India-bound LPG tankers exiting the Persian Gulf via Hormuz despite elevated risks. In response to consumer pain, the Philippines endorsed a price ceiling of 50 pesos ($0. per kilo on imported rice to combat fuel-driven food cost surges, while Egypt imposed emergency measures after its natural gas import bill tripled since the war began. Meanwhile, the US administration's response has drawn bipartisan criticism, as President Trump’s decision to ease oil sanctions on Russia and Iran was seen by many as benefiting adversaries in an attempt to stabilize markets.

Political Volatility and US Federal Standoffs

Political maneuverings in Washington are compounding market uncertainty, particularly regarding essential government functions. The ongoing partial shutdown entered a new phase as House Republicans revolted against a Senate funding measure for the Department of Homeland Security (DHS), passing a rival bill and dimming prospects for a quick resolution that would ease airport chaos. Amid the standoff, President Trump stated he would personally order TSA agents paid while legislative talks stalled, even as reports indicated that Hartsfield-Jackson Atlanta International Airport, a major chokepoint, would not see wait times ease due to the funding crisis. On other fronts, the President’s foreign policy remains highly contested; Senator Lisa Murkowski is reportedly drafting a formal authorization for the use of military force in Iran, seeking to place parameters on the operation amidst ongoing criticism of Trump’s improvisational diplomacy.

Domestically, the atmosphere remains charged, with political gatherings reflecting underlying party fissures. At the Conservative Political Action Conference (CPAC), organizers attempted to manage dissent, creating space for potential successors to Trump, though the event saw mixed results in shifting away from an 'America First' focus amid the ongoing war. Separately, financial regulators are also facing scrutiny: Governor Newsom banned California officials from using insider information on prediction markets following reports of well-timed wagers tied to Trump administration actions, while the regulatory apparatus itself appears strained, with the SEC division overseeing private credit firms losing nearly 24% of its staff last year.

Corporate Finance and Asset Management Trends

The volatility stemming from the conflict is causing significant stress in specialized financial sectors, though some asset managers are capitalizing on the dislocation. Private credit funds, already burdened by heavy redemptions, faced new pain in February, marking what may be their worst month in over three years, leading investors to question prior valuations. This environment is prompting a "dash for cash" among financial institutions, which are quietly building protective buffers against potential credit meltdowns. In contrast to sector stress, BlackRock CEO Larry Fink received a 23% raise, bringing his compensation to $37.7 million, largely driven by the firm's aggressive expansion into private markets. Meanwhile, the IPO market saw further turbulence: Software firm Visma AS pushed its planned London IPO to next year, while Yesway Inc., a PE-backed convenience store operator, filed for an offering amidst the broader market volatility.

In technology and investment, the focus remains split between AI expansion and market correction. Despite industrial giants falling into correction territory—a negative signal for the broader equity market—Goldman Sachs traders advised against shorting stocks, citing vulnerability to a short squeeze if geopolitical tensions subside. This caution contrasts with the AI sector, where companies like Anthropic face scrutiny after reports suggested their AI models could be exploited by hackers to circumvent cyber defenses. Furthermore, the private tech valuation bubble shows signs of deflation, as the Fundrise Innovation Fund shares fell sharply for a second day, although they remain above the underlying value of their private holdings.

Infrastructure and International Development

While global conflict constrains some international investment, specific regional infrastructure projects are often tied to domestic security or connectivity goals. India is planning 100 new airports and 200 helipads in smaller cities to dramatically boost regional trade and tourism, with a new $1 billion airport near Delhi already sparking a construction frenzy in the farming town of Jewar. In a move designed to anchor itself as a financial center, Hong Kong is actively inviting China-friendly central banks to participate in its gold-clearing system. Elsewhere, the UK’s power grid is showing resilience to the energy shock, as renewables output hit a record high in mid-week, helping to blunt the impact of high fuel prices on consumer costs.

However, the war’s impact is severely damaging economies dependent on energy exports. Iraq’s economy is teetering as crude exports collapse, with sales falling by more than 70% and creating a major shortfall in the state budget. Further afield, Barrick Gold delayed its $9 billion copper and mine development in Pakistan due to regional security concerns amplified by the Middle East conflict. In the corporate sphere, Carnival Corp. cut its full-year profit outlook, stating that while demand remains strong, sharply higher fuel costs are eroding gains, a common theme seen across travel and logistics sectors.