The hidden investment consequences of the Iran war

Markets recoiled when the US entered Iran, but the lasting impact may not show up in headline data. For long-term investors, the real shifts are emerging across defence, energy and critical minerals.

In the first two months of 2026, markets followed the playbook. Developed ex-US and emerging market equities were outperforming with a strong global growth outlook and a weakening US dollar.

Gold was trading above US$5000 an ounce for the first time while US indices were treading water on AI jitters.

Then, on the last day in February, the US invaded Iran and began a war that remains ongoing today.

What Trump may have hoped would be a swift operation, toppling the existing leadership and spurring protesters to install a new government, has instead become his trickiest geopolitical entanglement yet.

Equity markets pared their early year gains to be trading down across the world over March, which have more recently rebounded on hopes of a resolution.

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