Despite the effective shutdown of the Strait of Hormuz in March 2026 and escalating U.S.–Israel–Iran tensions, global financial markets have remained unexpectedly stable. While oil prices briefly surged and the Dow Jones Industrial Average saw sharp intraday volatility, broader indices such as the S&P 500 avoided sustained sell-offs.
This resilience is underpinned by a historic $26 trillion cache of sideline liquidity, structural shifts toward AI-driven capital investment, and the absence of systemic credit stress. At the same time, markets are repricing assets tied to a prolonged geopolitical order, including gold and defense equities such as Lockheed Martin, as global rearmament accelerates.
The key risk remains duration. If the selective blockade of the Strait of Hormuz persists, today’s liquidity buffer may prove to be a delaying mechanism rather than a permanent shield.