Public Markets 3 Days

Last updated: April 1, 2026, 8:30 PM ET

Geopolitical Tensions Drive Energy & Equity Markets

Global markets experienced a sharp swing as optimism regarding an end to the Iran war drove Asian stocks to rally the most in nearly a year, tracking a significant climb on Wall Street. This sentiment was partly fueled by President Donald Trump signaling a willingness to end the US military campaign against Iran, causing oil prices to momentarily slip below $100 a barrel for Brent crude. However, underlying anxiety persists, as higher-for-longer oil prices threaten the global economy and corporate earnings, and traders who made large leveraged bets expecting a crude plunge find themselves getting crushed. The uncertainty is compounded by the fact that while the US and Israel inflicted damage on Iran’s military, the nation still coordinates with regional militias, and President Trump’s claims of having achieved "regime change" appear at odds with the reality of Iranian leadership.

The escalating conflict has had profound, tangible effects across global supply chains and consumer costs. Fuel prices surged by a record amount in March for UK motorists, placing pressure on Prime Minister Keir Starmer, while the war has forced oil traders to undertake longer, stranger journeys for diesel cargoes, impacting nations from Australia to Africa experiencing fuel supply shocks. In response to shortages spurred by panic-buying, Western Australia invoked emergency powers to compel fuel suppliers to detail their chains, and the UK is bracing for its final tanker of Middle Eastern jet fuel this week, with Ryanair’s CEO warning that summer flights could be canceled. This energy disruption is also hitting manufacturing, with US plastic bottle makers getting squeezed by war-driven force majeure on key components, and German power prices surging to four times French levels due to natural gas supply disruptions.

Corporate Finance and Dealmaking Momentum

Despite geopolitical headwinds, M&A activity remains strong, with the year off to the strongest start for big deals ever, as companies push forward with tie-ups. Private equity giant Blackstone arranged a $1.2 billion credit facility for Air Trunk’s data center expansion in Japan, while also advancing talks with Accor SA to acquire its stake in Essendi for up to €975 million. In the high-growth tech sector, Elon Musk’s SpaceX filed confidentially for an IPO, setting the stage for potentially one of history’s largest offerings, a move that has boosted smaller AI satellite start-ups gaining traction with investors. Meanwhile, beauty conglomerate Estée Lauder advanced negotiations with Spain’s Puig Brands to create a combined entity through a largely stock-based transaction.

In private markets, volatility is causing friction among traditional managers. KKR & Co. curbed redemptions for its non-traded private credit fund, KKR FS Income Trust, following a surge in withdrawal requests, mirroring broader concerns over the $22 trillion private capital industry facing comparisons to 2008. The internal governance issues at quantitative fund Two Sigma continued to plague the firm, culminating in the quiet resignation of a co-chief appointed to quell the ongoing dispute between founders John Overdeck and David Siegel citing ongoing governance challenges. Furthermore, the digital banking sector saw a retreat, with UK-based Monzo closing its U.S. operations to focus exclusively on its core European markets.

Fixed Income and Sovereign Debt

The volatility stemming from the Middle East conflict is creating divergence in fixed-income markets across Asia. South Korean borrowers rushed to issue $24 billion in offshore bonds to secure favorable rates ahead of massive 2026 maturities, seemingly shrugging off immediate war concerns. Conversely, the corporate bond pipeline in Japan has slowed to its slowest pace since 2023, as investors grapple with uncertainty. In contrast, Chinese government bonds demonstrated resilience against a backdrop of a global debt sell-off. Elsewhere, Charlotte received approval to issue $650 million in municipal debt to finance upgrades for the Carolina Panthers’ stadium, while in Nigeria, lenders successfully raised 4.7 trillion naira ($3.4 in fresh capital to meet new central bank balance sheet standards.

Sector-Specific Movements and Regulatory Scrutiny

The AI boom continues to reshape capital allocation, with companies like OpenAI raising a record $122 billion, including $3 billion from retail investors for the first time. However, Bain Capital’s David Gross cautioned that many CEOs are misapplying AI by focusing on technology rollout over strategy. This energy demand is prompting warnings from industry leaders, such as David Crane, who stated that data centers should bear the direct cost of developing supporting power infrastructure. In the automotive sector, the high fuel prices are complicating consumer choices, raising the question of whether a $100 oil price will accelerate the shift to EVs. General Motors reported a sharp nearly 10% decline in car sales, mirroring drops seen at Toyota and Hyundai, as analysts project a 7% contraction in first-quarter U.S. vehicle sales.

Regulatory bodies faced challenges across several fronts. The US audit regulator pledged to rewrite an oversight rule following backlash from the industry, acknowledging that some parts of the quality control standard imposed by the Biden administration ‘may be unnecessary.’ Meanwhile, the former engineering chief of the collapsed FTX exchange, Nishad Singh, agreed to return $3.7 million in illegal profits to settle fraud charges with the CFTC. In Asia, a probe into the Australian Securities Exchange (ASX Ltd. found significant risk and compliance failures that could negatively affect Australian financial markets. Elsewhere, the luxury toymaker Pop Mart International Group faces a relentless selloff, wiping out $33 billion in value as skepticism grows over its post-Labubu growth prospects.