Speaking to ET Now, market expert Anurag Singh outlined what he believes will ultimately determine the course of the dispute and its impact on financial markets.
Focus on strategic goals
Singh suggested that the main goal of the United States and Israel is to weaken Iran’s military and nuclear capabilities while keeping the world’s energy supply routes open. “The end game is this – the US and Israel must completely destroy Iran’s capabilities, its nuclear weapons must be completely destroyed … and the Strait of Hormuz must be opened immediately.”
The Strait of Hormuz is one of the most important energy checkpoints in the world, transporting about 20% of the world’s oil.Earnings concerns are already priced in
According to Singh, equity markets have already started to factor in the risk of weaker corporate earnings, especially in consumer-related sectors.
“Consumer discretionary companies have already taken a roughly 20% correction in anticipation of earnings declines.”
However, he noted that the release of emergency oil reserves could give policymakers some time to stabilize supplies.
“Releasing hundreds of millions of barrels of reserves bought about 20 days. In those two or three weeks, a solution might be made.”
Shipping and insurance challenge
Even if oil tankers are given military protection, logistical and insurance barriers remain a major concern for international trade.
“It’s one thing to say the ship will be safe, but someone has to steer the ship through the strait first. Who will be brave?” Singh believes the ultimate measure of success will be the long-term security of the shipping corridor. “If the Strait of Hormuz is permanently removed from Iran’s control, victory will be decided.”
Markets face many upsides
Beyond geopolitics, Singh highlighted that equity markets are already facing several structural concerns.
“The average stock is down about 17% on the S&P, and about 27% on the Nasdaq, although the indexes show only a small correction.”
He cited three key concerns for investors: the disruption of artificial intelligence in software companies, risks in private credit markets, and inflationary pressures.
“There are three sets of concerns that the market must overcome before moving to new highs.”
An important two weeks ago
Despite the turbulence, Singh said the long-term market outlook remains positive if the situation stabilises.
“Forecasts for the year still point to earnings growth of around 12% and the S&P potentially hitting 7,500 if things stay as they are.”
For investors, the immediate outlook hinges on how quickly geopolitical tensions ease and whether oil supply routes stabilize.
“These two weeks are very important. Something has to come out of this, otherwise it will become a long-term conflict.”
