Markets Update March 2026 - The Iran conflict is weighing on the markets

The conflict with Iran continues to keep market participants on edge and dominate market activity. Stock markets in regions that are highly dependent on energy imports—and where rising energy prices therefore pose a significant burden—are under particularly heavy pressure. In addition to Europe and Japan, this includes Asian emerging markets. The U.S., by contrast, is less affected, as it is largely self-sufficient in terms of energy policy. Furthermore, large US technology stocks in particular are currently being treated as safe havens and have therefore recorded smaller price losses compared to other sectors. In addition to solid balance sheets and a strong market position, they benefit above all from business models that are significantly less dependent on energy prices than traditional consumer-sensitive sectors.

Apart from the Iran conflict, the investment environment remains generally positive. Analysts have so far remained largely unimpressed by the hostilities, and earnings expectations are consequently stable. As stock markets have retreated in recent weeks, valuations have also fallen. Excessive pessimism could therefore prove counterproductive, as the conditions for significant price gains are fundamentally in place—provided the Iran conflict remains temporary and does not permanently weigh on the investment environment. 

However, it is difficult to estimate how much longer the war with Iran will last. While the mullah regime remains firmly in power, the U.S. and Israel have inflicted such massive damage on Iran’s nuclear facilities, as well as large parts of its military infrastructure and defense industry, that they could claim a face-saving military victory and justify an end to hostilities. Above all, U.S. President Donald Trump is under increasing pressure, both domestically and internationally, to end the war soon. Recently, he has adjusted his rhetoric in this direction—unlike Iran, which has so far shown no willingness to de-escalate militarily. Rather, the regime is likely interested in further destabilizing the Gulf region for the time being, thereby driving up the costs of an attack on Iran to deter future aggressors. It is currently difficult to predict when Iran will be ready for de-escalation. Until then, professional investors would be well advised to stick to a balanced asset allocation with hedging elements.