Almost 100 days have passed since the latest escalation involving Iran. Patrick Farrell, Group Chief Investment Officer at Charles Stanley, part of Raymond James Wealth Management, shares his views on the impact on global energy and financial markets.
As we approach the 100-day mark since the latest escalation involving Iran, markets are following a familiar pattern seen in the Russia-Ukraine conflict, moving quickly from shock to pricing, and then into a phase of desensitisation.
The key difference this time is how narrowly focused the market response has become. While energy markets continue to reflect underlying risks, particularly around supply routes and shipping constraints, equities have largely shifted their attention back to AI and technology.
That concentration stands in contrast to Ukraine, where leadership was broader across energy, commodities and defence.
Today’s market is more willing to look through geopolitical noise, even though the physical reality, such as constrained flows and energy pressures, has yet to fully resolve.
This creates a disconnect: markets are trading the future, while risks remain embedded in the present. From here, any disruption to supply could quickly reintroduce volatility into an otherwise tech-driven rally.
Volatility hasn’t disappeared, it’s just been compressed beneath the surface, with markets choosing to focus on growth over geopolitics for now.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
Main image: war, geopolitics, ehmitrich-WcG7DOyrSoM-unsplash
