A reliable resumption of shipping through the Strait of Hormuz would reduce the risk of sustained elevated energy prices and further central-bank hawkishness. (UBS)
A reliable resumption of shipping would allow markets to focus more fully on resilient growth, strong earnings, and AI demand, while commodity exposure can improve portfolio resilience if the situation deteriorates again.
US-Iran talks remain fraught, and the ceasefire is fragile.
- Recent attacks on commercial shipping and military targets have shown how quickly the ceasefire can come under pressure.
- Hostile rhetoric from both sides has kept the diplomatic path volatile, even as talks are expected to continue.
- Shipowners remain cautious, maritime security risks have risen, and unresolved disputes over Hormuz transit routes and control could still disrupt normalization.
But a return to stable shipping looks likely, reducing risks to markets.
- Ships are still moving through the Strait of Hormuz, even as some owners have become more cautious after recent attacks.
- Brent crude has fallen back close to prewar levels, easing fears of a sustained energy-driven inflation shock.
- That reduces the risk of a more hawkish central-bank response and should allow investors to focus more fully on resilient growth, strong earnings, and AI demand.
But investors should brace for bumps in the road and use market strength to improve portfolio resilience.
- Progress toward a diplomatic solution reinforces our view that equities remain Attractive.
- Risks have not gone away, and investors should use market strength to strengthen diversification.
- Active commodity strategies, including energy, can help buffer portfolios against renewed supply disruption, while offering a mix of return potential and diversification.
Did you know?
- The Strait of Hormuz is normally the world's most important oil route. It accounted for more than one quarter of global maritime oil trade prior to the dispute and moved about 21 million barrels per day to global markets from Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates.
- We forecast 20% earnings per share growth from the S&P 500 this year. We see upside risk to our 62% earnings growth forecast for the MSCI Asia ex-Japan this year and expect Europe’s corporate profits to grow around 25% over two years.
Investment view
We have continued to view equities as Attractive through the conflict in the Middle East. Our base case is that diplomacy eventually allows markets to focus more fully on resilient growth, strong earnings, and AI demand. Investors should stay invested, while using market strength to review concentration risk, strengthen diversification, and consider broad commodity exposure with active management to help manage residual energy risk.
Original report: What will a US-Iran deal mean for markets?, 29 June 2026.
