Against the backdrop of rising geopolitical tensions and their implications for global markets, we sat down for a conversation with Matt Gertken, Chief Geopolitical and U.S. Political Strategist at BCA Research, a leading independent provider of global investment research. Matt frequently appears on CNBC, Bloomberg, and ABC News.
What the Iran Conflict Means for Markets—and What Investors Should Watch
Q: What’s happening—and why does it matter for investors?
The war in Iran has quickly become one of the most important drivers of global markets. The reason is straightforward: energy.
The Middle East plays a critical role in global oil and gas supply, and when that supply is disrupted, especially around key shipping routes like the Strait of Hormuz, it can ripple across the entire global economy. We’re already seeing that play out, with energy flows impacted and oil prices moving meaningfully higher.
For investors, this isn’t really about geopolitics itself. It’s about what geopolitical events mean for inflation, economic growth, and ultimately market behavior.
Q: Why are energy markets at the center of this?
Because about one-fifth of global oil, one-fifth of liquefied natural gas, and 20%-to-40% of Oil & Gas products flow through the Strait of Hormuz, which connects the Persian Gulf to the Indian Ocean and global markets.
Since the conflict began, shipping disruptions have affected a meaningful portion of global energy supply. Brent crude oil prices have climbed above $100 per barrel and pushed toward $120, a critical threshold that represents a doubling of the Brent price from before the conflict. When energy prices rise like this, the impact is broad and touches transportation, manufacturing, and food production.
That’s why this isn’t just an energy or commodity story. It’s something that can influence the entire economic backdrop. Higher food and fuel prices detract from household income and spending as well as corporate investment.
Q: What are the key scenarios investors should be considering?
Rather than trying to predict exactly what will happen next (i.e. trying to predict the future), it’s more helpful to think in terms of scenarios of how this could play out.
One path is escalating military conflict in the Strait, where energy supply remains constrained and prices stay elevated or move higher. In that environment, energy prices and inflation would rise too high, destroying global energy demand. Economic growth would likely contract.
Another possibility is partial stabilization. Supply improves, but is not completely restored to previous levels. Prices stay elevated but below the $120 threshold, and the result is slower growth with lingering inflation. That would equate with a kind of “stagflation.”
There is also a path where tensions ease more meaningfully—an outcome that has become more plausible following yesterday’s announced agreement to pause escalation and protect the free flow of energy through the region. If the agreement holds and is implemented effectively, trade routes could normalize and supply constraints ease, allowing energy prices to move lower over time. In that environment, inflation pressures would subside gradually and global growth could rebalance rather than deteriorate.
Q: What is one common mistake investors make during geopolitical events?
One of the most common mistakes is ignoring clearly identifiable risks until they materialize.
In many cases, countries signal their intentions or establish boundaries well in advance. When those signals are dismissed or underestimated, the resulting conflict events can feel sudden, even if they were building over time.
Paying attention to those signals, namely when they are backed by economic or military capability, can help investors better anticipate potential disruptions rather than reacting after the fact.
Q: What should investors be watching most closely right now?
There are a few key things that really matter.
First is the condition of critical energy infrastructure. The International Energy Agency (IEA) has noted that even if traffic through the Strait reopens, damage to existing facilities, pipelines, and terminals could constrain supply for some time. That raises the risk that disruptions persist longer than expected, keeping oil prices elevated rather than allowing a rapid normalization.
Second is the flow of goods, particularly through Hormuz. Other shipping routes are less significant. If Hormuz routes remain constrained, it puts additional pressure on supply chains.
Duration also matters. Short‑lived disruptions are often absorbed by the global economy, and yesterday’s ceasefire announcement improves the odds of a near‑term easing. However, if normalization is delayed or the ceasefire proves fragile, the impact becomes more meaningful. If trade through Hormuz does not normalize by later in April, it will become much harder to stabilize the global economy and financial markets.
Q: What are we seeing in markets so far?
This crisis isn’t isolated to one area—it’s a more widespread adjustment as markets process what this environment could mean going forward. Normalization is positive for both stocks and government bonds. Recession would be positive for bonds but not stocks. Stagflation is negative for both asset classes.
Q: What role does time horizon play in evaluating risks like this?
Time frame is critical. What feels important in the short run does not always prove consequential over time.
A more effective approach is to build a framework that looks out over a defined period such as the next six to 12 months and evaluate how events could unfold over that time. This helps investors avoid reacting to every new development and instead stay focused on what is likely to matter over a meaningful investment horizon.
Q: If conditions improve, how quickly could things stabilize?
Even in a more constructive scenario, it’s unlikely everything snaps back immediately. Some inefficiencies tend to linger, and markets often remain sensitive to any signs of renewed disruption. A ceasefire could be vulnerable to collapse if Iran remains in control of Hormuz and does not at least hand over the missing stockpile of highly enriched uranium – a core structural objective of the administration. Cyclically, however, the Trump administration has been willing to negotiate a ceasefire that achieves something less than these aims due to domestic political considerations.
In other words, improvement can happen, but it doesn’t necessarily mean a return to the environment we had before.
Q: How do you approach analyzing geopolitical events as an investor?
A helpful way to think about geopolitical analysis is to start with what doesn’t change quickly. Structural factors like geography, economic systems, population dynamics, and national constitutions tend to change slowly over time and thus provide a more reliable foundation for understanding risk than individual personalities and political rhetoric.
From there, you layer in the business cycle and political cycle, which move a bit faster, but still take years to change from one phase to the next.
Finally, you analyze current events and headlines. That order matters. It helps avoid overreacting to short-term noise and keeps the focus on what is most likely to drive outcomes over time.
Q: What’s the most important takeaway for investors?
Periods like this can feel uncertain, but they also reinforce the value of staying disciplined and focusing on long-term objectives rather than reacting to short-term noise.
Right now, that comes down to energy, inflation, and growth. Headlines will continue to change, but those underlying factors are what matter most
At Trust Point, we remain focused on helping you navigate uncertainty with clarity and discipline. While headlines may change, our commitment does not—to simplify decisions and help you secure your wealth over time.
If you have any questions or would like to discuss your specific questions with our financial professionals, please reach out to your relationship manager.
Matt Gerken is the Chief Strategist for both BCA’s Geopolitical Strategy and US Political Strategy services, where he oversees their coverage of market- relevant policy developments in the US and worldwide.
