Markets are being driven by geopolitics once again.
Yesterday’s trading session highlighted how quickly macro events can outweigh company fundamentals. The main catalyst was the renewed tension between the United States and Iran, which pushed investors back toward energy markets and inflation expectations. Oil briefly traded above $90 per barrel, while European natural gas climbed above €60/MWh, levels not seen for several months. Although both commodities partially retraced later in the day following reports of renewed diplomatic contacts, uncertainty remains elevated.
According to Il Sole 24 Ore, the key issue is the disruption of shipping through the Strait of Hormuz. Oil tanker traffic has fallen sharply, while LNG exports from the Gulf have been severely affected. This is particularly important for Europe, which remains highly dependent on imported natural gas and could face additional price pressure if the situation persists.
Financial markets reflected this uncertainty. European equities finished almost unchanged, with the FTSE MIB closing down just 0.04%, as investors balanced geopolitical risks against resilient corporate fundamentals. In the US, Wall Street managed to recover part of the early losses thanks to the strength of semiconductor stocks, showing that technology continues to provide support even during periods of elevated macro risk.
The article also underlines an important implication for investors: higher energy prices could reignite inflationary pressures and reduce the room available for central banks to ease monetary policy. Without a meaningful de-escalation in the Gulf and a normalization of shipping routes, energy markets are likely to remain volatile, with consequences extending well beyond the oil sector.
For long-term investors, this is a reminder that diversification matters. Geopolitical events can rapidly reshape market leadership, influencing commodities, inflation expectations, transportation costs and ultimately corporate profitability. Monitoring these macro developments is just as important as following earnings season, because they often become the primary driver of market sentiment when uncertainty rises. ... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
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