7 Market Movers Special Edition | March 2, 2026

In today’s 7 Market Movers Special Edition, Doug Huber, Wealth Enhancement Deputy Chief Investment Officer, discusses the U.S. and Israel’s military strikes in Iran over the weekend and how investment markets are responding.

• Volatility is up, but history suggests these shocks will not last
• Main risk is higher oil and gas prices from potential Strait of Hormuz disruptions
• Current signals point to a limited conflict and a relatively muted market impact so far

If you have any questions or would like to discuss these recent developments with an advisor, don't hesitate to reach out.

TRANSCRIPT BELOW

Hello everybody, my name is Doug Huber, and I'm the Deputy Chief Investment Officer here at Wealth Enhancement. We wanted to come to you today with a special communication surrounding the U.S. and Israeli military strikes in Iran over the weekend. This event is understandably drawing investor attention as the markets reopen today, and while the most important focus should remain on the safety of our troops serving in theater and for the civilians living in those affected areas, we wanted to provide some thoughts and observations on the impact these events are currently having on our financial markets.

Historically, geopolitical events, while certainly unsettling, have tended to have limited and short-lived impact on the broader equity market unless they directly involve a major developed economy or materially disrupt economic infrastructure. And I think Iran's direct footprint in the global economy is very small. It represents less than 1% of global GDP, and it's a modest share of global trade flows. The more meaningful economic channel to monitor is Energy. Iran is a significant oil producer - I think the number two in the world. And more importantly, the Strait of Hormuz, which borders Iran, is a critical choke point through which roughly 20% of the world's daily oil and liquefied natural gas pass through. And so the disruption to these shipping lanes has certainly led to a spike in volatility for oil and natural gas prices. Oil is up roughly 7-8% today. And so that certainly has longer impacts the longer this goes on. This could influence inflation expectations and certainly near-term market sentiments.

And so what the market now must wrestle with is a larger framing issue. Is this the beginning of a prolonged regime change campaign similar to what we did in the early 2000s in Iraq and Afghanistan? Or is this a short, targeted shock intended to force negotiations with Iran's regime? And so I think that distinction is going to matter enormously for markets from here.

If it's a contained episode with kind of a rapid diplomatic engagement, we'd likely see this volatility fade. But a prolonged conflict that entangles energy productions, exports, shipping lanes, that's going to require markets to price in a more durable shift in risk. And so what could that lead to? I think we could see a more sustained spike in oil and higher gas prices. That would thus put upward pressure on inflation and budgetary concerns. And what that does is then it complicates further the Fed's easing path. So that ultimately, if you put that all together, that really could put a more stagflation-like drag on the equity markets. At this time, all signs are indicating to us at least that the U.S. is not looking to engage in a prolonged regime change campaign. And so that bodes well for global markets, think both in the short and long term. And I think you're seeing that price in today, as markets in the U.S. are down, you know, between a 0.5-1%.

Bonds are staying relatively steady. Oil obviously spiked, but the market reaction has been, I think, a bit muted compared to what the initial shock was when we first conducted the campaign on Friday evening. Historically, geopolitical shocks do produce that kind of initial risk off tone, and we're seeing that right now. But if you look historically, whether it's at prior campaigns in the Middle East, and even going back to prior wars, there's usually a stabilization within days to weeks.

And most times and more often than not, there's a recovery, unless there's really that hit to the global economy I mentioned. And so you can look kind of six and 12 months post these geopolitical events and more often than not, almost nine out of 10 times the market is up following these events, because they're usually in areas and affect parts of the economy that aren't massively disruptive to the broader global situation. Here at Wealth Enhancement, our portfolios are built with these scenarios in mind. We try to balance some amount of high-quality growth opportunities, but we do so in a risk optimized framework, and it's important to keep that in mind.

Right now, we're actively monitoring the situation. Things are changing very quickly. We're obviously keeping the closest eye on the shipping and Energy infrastructure developments. We like to see the Strait of Hormuz is technically open, although traffic is not passing currently. So we'd like to see that open up a little bit more.

OPEC, the oil production nations, have agreed to resume oil production increases at a slightly accelerated pace. So that could help. But we got to get that oil out of there. And so it'll be important to keep an eye on how the shipping lanes are progressing.

We obviously want to keep an eye on what the retaliatory scope of this looks like. How far can Iran reach? How long do they continue to push against some of their neighbors and bomb areas like the UAE, Saudi Arabia, Oman, Jordan, Beirut, and what would their retaliation look like back towards Iran? Obviously, if we can avoid Energy infrastructure, that's a positive. We're keeping an eye on credit spreads in the CDS markets to see how is the market pricing a bigger risk. Typically, you would see that show itself in the credit markets first. And then we're obviously keeping an eye on just what is volatility looking like in the markets.

Again, with these bouts of uncertainty, there's an inclination to take risk out of portfolios by market participants. You see that, and like we said, there's that short-term impact, but it usually rights itself pretty quickly as the duration of this conflict gets a little more clarity. You know, as always, our diversified portfolios are designed with these types of risks in mind. And history constantly reminds us that maintaining discipline in these periods that are uncomfortable, that really leads to the best long-term investment success. And so we will be back later this week with our typical 7 Market Movers video series, where I'm sure we'll get into all the updates that have gone on over the last several days. But until then, we wanted to give you this update, and we look forward to talking to you later this week. Thank you so much.

This information is not intended as a recommendation. The opinions are subject to change at any time and no forecasts can be guaranteed. Investment decisions should always be made based on an investor's specific circumstances.

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