Welcome to the next stage of the new world order. The Trump administration is betting it can successfully decapitate the Iranian regime in the same style as its raid on Venezuela. So far the market is relatively calm, but the risks with this clash are much bigger. 

Investors have become used to ignoring geopolitical tensions in recent years. However, the U.S.-Israel strikes that killed Iran’s Supreme Leader Ayatollah Ali Khamenei set off a conflict that will test nerves. President Donald Trump has spoken of overthrowing the Iranian regime, which has significant ability to inflict economic and military pain if backed into a corner. 

The immediate reaction has been predictable—a surge in oil and gas prices and haven assets such as gold, plus beneficiaries including defense stocks, while airline stocks suffer. But despite shipping being directed away from the Strait of Hormuz—through which roughly 20% of the world’s petroleum passes—crude prices early Monday were still only roughly where they reached during the 12-day Iran-Israel conflict in June 2025, suggesting investors expect a reasonably swift resolution. 

It makes sense not to overreact. Iran’s initial retaliation has resulted in limited casualties and damage to military and civilian facilities, and Trump has suggested he is open to negotiation. But the president has talked of a time frame of four to five weeks for military action, while fighting has already spread to countries such as Lebanon—and that creates the possibility of a much more extended Middle East conflict. While the U.S. is relatively shielded from a rise in energy prices, the effects will initially be felt across emerging markets and Europe. And if the fighting stretches on, rising energy prices will mean pain at the pump for American drivers and bring into question further rate cuts by the Federal Reserve. 

Trying to trade on unpredictable geopolitical events is generally unwise as the moves are prone to reverse quickly. But diversification away from high-risk sectors such as technology toward assets such as gold and energy already looked sensible before the latest conflict erupted. These most recent events might only accelerate the market in the direction it was heading already.

—Adam Clark

Barron’s Live: Stocks have churned through the first two months of 2026, and that was before the U.S. launched attacks on Iran. Now, investors must grapple with the future of the AI trade, tariffs, interest rates, and the uncertainty of a war in the Middle East. Barron’s Senior Managing Editor Lauren R. Rublin speaks with Ben Levisohn, Barron’s new editor in chief, about stocks and sectors in the news, and what to do now. Sign up here.

Get more of the journalism you love. Choose Barron’s as a preferred source in Google.

The conflict in the Middle East widened and escalated overnight as Hezbollah entered the fight, while the global oil supply faced fresh threats as the U.S. and Israel continued to trade missile attacks with Iran.

• Israel launched strikes on Hezbollah targets in Lebanon after the Iran-backed militant group fired its own rockets in retaliation over the death of Iran’s Supreme Leader Ayatollah Ali Khamenei, The Wall Street Journal reported.

• Iran’s attacks continued across the region. Saudi Aramco’s Ras Tanura refinery was partially closed early Monday after being hit by debris following the interception of two drones, Saudi Press Agency reported. It added that some units were shut down as a precautionary measure “without any impact on the supply of petroleum.”

• The OPEC+ cartel of oil-producing nations agreed to hike output by 206,000 barrels per day in April following a virtual meeting on Sunday. The organization, which includes Saudi Arabia, U.A.E., and Russia among others, did not reference the conflict in its statement but said it would “continue to closely monitor and assess market conditions.”

• The U.S. and Israel continued to hit Iran Monday, striking 2,000 targets in the country since their campaign began on Saturday, the Journal reported, citing two people briefed on the operation. Iran’s Red Crescent organization said 555 Iranians have been killed in the attacks so far.

What’s Next: Oil supply is under threat from missile strikes and the effective closure of the Strait of Hormuz. Brent crude prices briefly spiked above $80 a barrel in early Monday trading with Wood Mackenzie analyst Alan Gelder predicting $100 is on the table again. Prices are likely to remain volatile in the days ahead.

—Callum Keown

The Iran conflict is causing chaos for international travelers who planned Middle East stops and for international shippers who rely on the region’s waterways for the passage of cargo, oil, and energy products. The critical energy transport waterway, the Strait of Hormuz, appears to have effectively closed.

• Global shipping giant Maersk rerouted cargo bound for the Suez Canal to the Cape of Good Hope at the southern tip of the African continent instead amid the conflict. The switch affects shipments moving from the Middle East and India to the Mediterranean Sea and from the Middle East and India to the U.S. East Coast.

• Maersk also halted shipments through the Strait of Hormuz until further notice. The Wall Street Journal reported that Iran’s Islamic Revolutionary Guard Corps, or IRGC, has warned ships not to travel through the Strait, the passage for 26% of the crude trade and 23% of liquefied natural gas, OPIS says.

• That forces shippers to look for other routes. Maersk is sending cargo around the southern tip of Africa. In addition, nearly all flights were canceled into and out of Dubai International airport on Sunday with more cancellations today fanned across the Gulf plus Israel. Emirati stock markets are closed today until further notice.

• The U.S. embassy in Bahrain encouraged Americans to avoid hotels because they might be a target, according to Dragonfly, a risk analysis and security intelligence service owned by Barron’s parent Dow Jones. Bahrain’s interior ministry confirmed the Crowne Plaza Hotel in Manama was targeted in an Iranian strike, Dragonfly said.

What’s Next: Gasoline prices are set to rise above $3 a gallon, rising in step with crude prices because of the conflict. Patrick De Haan, head of petroleum analysis for GasBuddy, expects the national average to break above $3 a gallon and said it’s likely to move toward $3.20 to $3.25 a gallon within two to three weeks.

—Liz Moyer, Ben Levisohn, and Janet H. Cho

With fourth-quarter earnings season almost over, this week’s stock market catalyst could be labor, with several fresh data reports due out. The big one, of course, is the jobs report for February, which comes out on Friday. Economists are expecting job growth to cool from the January reading.

• Economists forecast a 60,000 increase in nonfarm payrolls, nearly half the 130,000 gain in January. The unemployment rate is expected to remain unchanged at 4.3%. January’s jobs growth was the largest since December 2024, allaying fears of a weakening labor market. 

• Federal Reserve governor Christopher Waller, who dissented in favor of a rate cut at the most recent interest rate policy meeting, said that a cut will be “close to a coin flip” at the March meeting. But a spike in oil prices related to the Iran strikes could put March rate cuts on hold altogether.

• This week also brings reports about private payroll trends for February from ADP and unemployment claims for the latest week. The Fed will also release the latest periodic survey of its 12 district banks, with anecdotes about the local labor markets, business conditions, and consumer spending.

• Markets were rattled in recent days by artificial intelligence fears. Fintech firm Block announced cuts of nearly half its workforce because of AI. About 63% of workers globally would trade a 10% pay increase for a chance to improve their AI and digital skills, MarketWatch reported, citing Mercer.

What’s Next: While earnings are wrapping up, retailers are in the spotlight this week, including quarterly reports from Target, Macy’s, Kroger, and others. Retail sales for January, due out on Friday, are expected to show a 0.2% rise from December.

—Dan Lam and Liz Moyer

Investors have been wondering what changes to expect to Berkshire Hathaway’s $300 billion stock portfolio under a new CEO. In his inaugural shareholder letter, Greg Abel identified four Berkshire stockholdings—Apple, American Express, Coca-Cola, and Moody’s—suggesting they are forever stocks, or close to it.

• Abel said the concentrated approach Berkshire has taken to stock investing will continue, with limited activity in these holdings, though they may significantly adjust a holding if the managers detect fundamental changes in the long-term economic prospects.

• These stocks make up more than half of Berkshire’s equity portfolio, and Abel, who took over from Warren Buffett in January, put Berkshire’s stakes in five Japanese trading companies valued at $35 billion in the same bucket. Together, these nine stocks comprise two-thirds of the portfolio.

• It’s notable that two of Berkshire’s top five equity investments, Bank of America and Chevron, didn’t make that core holdings list. Berkshire has cut its holding in Bank of America roughly in half to 517 million shares, valued at around $28 billion, in the past 18 months. The Chevron stake totals about $20 billion.

• Berkshire has held its Coke and American Express for at least 40 years, and Moody’s more than 20 years. Berkshire paid an average of $3 a share for Coke in the late 1980s, compared with the stock’s record $81 close on Friday. The Apple stake is about a decade old but the size of the stake is well down from its peak.

What’s Next: Abel’s statement suggests that the Apple stake won’t be reduced further. The day-to-day management of the Berkshire equity portfolio remains unclear based on Abel’s comments. Buffett will be in the office five days a week and available to consult on equity investments.

—Andrew Bary