Gill Capital Partners Iran Update March 2026
Though we sent a recent commentary and certainly don’t want to inundate your inbox, we recognize that the market volatility and large-scale global events can be unsettling and stressful, and our goal is to provide you with pertinent information and perspective to help you navigate the ups and downs of this market. For that reason, we may send more frequent communication during periods of heightened economic news and volatility.
Attacks on Iran
This past weekend, the United States, in a combined military operation with Israel, initiated broad-based attacks on Iran following failed negotiations. The joint operation reportedly struck nearly 2,000 targets, including missile bases, nuclear-related facilities, air defenses, and command centers in what officials called “Operation Epic Fury.” The strike effectively removed the core leadership of Iran’s clerical regime and created the most significant political vacuum in the country since the 1979 Islamic Revolution, with interim leadership structures now attempting to stabilize the government.
The attacks represent one of the most direct military confrontations between the U.S., Israel, and Iran in decades, following years of proxy conflicts, nuclear tensions, and sanctions. Iran has retaliated with missile and drone attacks on regional targets and U.S. bases, drawing various other countries into the conflict, raising the risk of a broader Middle East war, and disrupting key energy and shipping corridors such as the Strait of Hormuz. As investors assess the geopolitical and supply-chain implications, financial markets have reacted to the escalation by driving oil prices higher, increasing volatility, and shifting toward traditional safe-haven assets such as gold and the U.S. dollar. In the historical context, the strikes represent a rare leadership-targeted campaign seen in conflicts such as Iraq in 2003, but applied to a still-functioning regional power, making the political outcome and market impact unusually uncertain.
What has been the market reaction thus far to these attacks?
Equity markets initially reacted negatively to the news, but the level of selling and fear trading was fairly muted compared to what one might have expected. We believe the market reaction reflects that the attacks were not entirely unexpected and that investors had the full weekend to process the news. U.S. equity markets experienced heavier selling early Wednesday after Iran claimed to have closed the Strait of Hormuz, a critical shipping route through which roughly one-quarter of the world’s oil, gas, and petrochemicals pass, driving oil prices toward $80/barrel. The Trump administration has since responded with an announcement of Federal programs and potential naval escorts aimed at reopening shipping lanes. This news initially calmed energy markets and helped to stabilize equity markets. We have also seen an initial rotation out of international and high-growth stocks into traditional safe havens such as gold, defense, and industrial stocks. Thus far, however, the market’s reaction to these events has not been all that dramatic. We interpret the initial ho-hum response as a reaction to oil prices, which have not moved as high as some might have expected under this scenario. Granted, oil has moved higher, but oil prices in the $70-$80 range do not derail the global economy. That said, oil moving towards $100/barrel or higher would likely drive a significantly different reaction. For now, the markets seem to be pricing in a relatively brief conflict with limited disruption to oil and energy markets.
Our view – We are, candidly, a little surprised by the muted market reaction, but caution that this is still very early and things are evolving quickly. We are watching the price of oil closely, as markets are taking their cues directly from that. As of this writing, the Strait of Hormuz is effectively closed to all shipping routes, irrespective of the Trump Administration's announcement of direct insurance relief and potential military escorts. The reality of reopening the Strait of Hormuz is likely far more complex. The International Transport Workers’ Federation and shipping lines are expected to officially label the area a “War Zone” at an emergency meeting on Thursday, which would require crew members to be paid substantial bonuses if they sail through the Strait. Crucially, though, it will also formally permit them to refuse to undertake such a voyage at all, likely leading to further disruptions in shipping. While we will not speculate on oil prices, we see a substantive risk of further supply disruptions that may not be fully priced in today.
We warn investors against knee-jerk or speculative reactions in situations such as this. History has rewarded those who can stick to their long-term plan and ignore the noise. We believe in diversification, and we see it working in portfolios. We will continue to monitor the situation and keep you informed as it unfolds. In the meantime, feel free to reach out if you wish to discuss what is going on in the world or have any questions.
As always, please let us know if you have any questions or concerns, or if we can provide assistance with any other financial planning matters including education, taxes, insurance, or estate needs.