Summary

• Equity markets have come under pressure amid growing concerns about the conflict in Iran and its effects on energy prices and inflation.
• As of April 21, Brent crude oil futures were trading at just under $100 per barrel - up more than 60% on the year.
• Sustained increases in energy costs could push inflation higher, complicating the outlook for interest rates at a time when markets were anticipating monetary relief.
• While the trajectory and duration of a potential inflation spike remain to be seen, the oil shock is going to be felt by consumers and businesses alike, and it appears inflation isn’t going away anytime soon.

By Kent Hargis, PhD & Peter Chocian

The Middle East conflict has sparked fears of an inflation shock. For investors, defensive stocks could provide some relief.

Equity markets have come under pressure amid growing

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