On April 1, 2026, the International Monetary Fund (IMF) released its forecast for the global economy against the backdrop of the US and Israeli military confrontation with Iran. According to a report published by Bloomberg, the conflict has triggered a large asymmetric shock that has hit developing countries hardest — those that had not yet recovered from previous crises.

The greatest difficulties are being faced by countries in Africa and Asia that are critically dependent on hydrocarbon imports. Supply disruptions and rising prices are depriving these regions of access to energy resources even when they are willing to pay a supramarket premium. The IMF allows for the possibility that the global system may move into a “transitional” state — a prolonged period of expensive energy and persistently high inflation that will be extremely difficult to control with standard monetary policy measures.

The crisis has spread beyond the energy sector, affecting food and fertilizer markets from the Middle East to Latin America. Shortages of agricultural inputs pose a direct threat to social stability in low‑income countries. As the fund’s analysts emphasize, “any spike in food prices becomes not only an economic but also a socio‑political problem in the context of constrained fiscal resources.”

The World Trade Organization (WTO) has confirmed that the previous global order has undergone irreversible change. The global trading system faces unprecedented uncertainty caused not only by military actions but also by the impact of US tariffs. A return to the previous status quo is regarded as impossible in the current geopolitical environment. 

Global energy prices may reach $150 per barrel if navigation through the Strait of Hormuz remains blocked within the coming month. This prediction was made on April 1, 2026, by Bruce Kasman, JPMorgan's chief economist. He estimates that the ongoing transportation isolation of the Persian Gulf could lead to a critical supply shortage and forced consumption restrictions for major industrial enterprises.

Analysts at Citigroup are considering even more drastic scenarios for the Middle Eastern crisis. They assign a 30% probability to the benchmark Brent crude rising to $150. However, if large-scale attacks on Iranian infrastructure occur or the blockade extends until June 2026, oil prices could soar to $200. Experts from the bank emphasize that investors are pricing in the risk of the conflict expanding geographically and damaging major refining hubs.

Saudi Arabia's national energy company, Saudi Aramco, has also revised its short-term expectations. According to analysts at the Saudi giant, prolonged closure of the waterway by Tehran could push prices to $180 by late April. While oil prices did not reach the previously predicted $138–140 by the end of March, volatility remains extremely high due to uncertainty surrounding the resumption of safe shipping.

The current situation in the Strait of Hormuz, through which approximately 20% of global hydrocarbon supplies flow, remains a key destabilizing factor for the global economy. Bruce Kasman of JPMorgan points out that each additional day of tanker fleet downtime increases inflationary pressure and depletes strategic reserves of importing countries. The market is awaiting official decisions from the governments of leading countries regarding measures to ensure the security of trade routes to prevent an energy collapse.

The US technology sector is undergoing its toughest valuation test since the dot‑com crash. The NASDAQ Composite has officially entered a correction amid the escalating military conflict between the US and Iran. However, analysts at Capital Economics view the current decline as a temporary re-pricing of assets rather than the start of a systemic market collapse.

Although the forward price‑to‑earnings (P/E) multiple for the IT sector within the S&P 500 has nearly converged with the rest of the market, the fundamental link between profits from AI adoption and long‑term growth remains intact. The sharp drop in market quotes has inevitably prompted comparisons to the 2000 tech bubble, when market slumps presaged a complete breakdown in corporate earnings expectations.

Capital Economics highlights a key difference: the convergence of big‑tech multiples with the broader market merely removes the initial “euphoria premium,” not a harbinger of profit recession. Unlike the speculative startups of the late 1990s, today’s hardware and software makers are deeply embedded in global infrastructure. They have solid balance sheets and generate strong cash flows even amid high inflation, giving them remarkable resilience.

Although the escalation in the Middle East has triggered a broad rotation into safe‑haven assets, institutional investors increasingly view the current correction as a “healthy reset.” Analysts assume this market sentiment clears the way for a recovery by mid-year once the fundamental environment gets back on track.

Meanwhile, Wall Street is anticipating the corporate earnings season starting in April, which will serve as the main stress for the sector. If the armed conflict does not spread beyond the Middle East, and the energy market rally is tamed, the US high-tech sector should again show outstanding performance. For now, the market is balancing geopolitical risks against AI’s long‑term potential, and many funds are using the drawdown as a strategic entry point for targeted long positions. 

The US stock market has entered the first-quarter earnings season of 2026 in a state of stark dissonance: valuation multiples are rapidly contracting, while corporate profit forecasts continue to rise.

According to the latest weekly report from Goldman Sachs Group Inc. (NYSE:GS) titled "Weekly Kickstart," the S&P 500 index has dropped by 9% from its January highs. The primary driver of the sell-off has been a combination of macroeconomic shocks: a sharp spike in energy prices, rising interest rates, and geopolitical instability fueled by the escalation of the military conflict in Iran.

Against this backdrop, the price-to-earnings (P/E) ratio of the benchmark index has decreased from 21x to 19x over the past month. The paradox of the current situation is that despite the market's steep correction, analysts have raised their consensus earnings per share (EPS) forecasts for 2026 by 3%.

Sentiment reset and fundamental background

Technical analysis indicates that some investors are capitulating. Goldman Sachs' sentiment indicator for US stocks has fallen to -0.9, the lowest level since August 2025. Historical statistics show that when the indicator falls below -1, it typically precedes a period of above-average market returns.

However, bank strategists warn that mere technical oversold conditions are insufficient to trigger a sustainable rally. The market requires a clear improvement in fundamental prospects. Otherwise, current valuations are pricing in the risk of further declines if the Middle Eastern conflict continues to escalate.

That said, the fundamental basis of the US corporate sector remains solid for now. Goldman Sachs maintains its baseline 2026 profit growth forecast for the S&P 500 at 12%, noting that this scenario holds only if macroeconomic shocks do not take on a protracted character.

Inflation, rates, and earnings season

The upcoming earnings season will serve as a critical test for Wall Street's optimism. Investors will be looking for evidence in balance sheets that companies can maintain margin levels amid soaring oil costs and disrupted global trade routes.

Market attention is also shifting to the Federal Reserve's response. Stagflationary pressures from geopolitical events and persistent core inflation make the path to potential interest rate cuts particularly challenging. In the context of a paradigm of "higher rates for longer," investors are increasingly favoring companies with strong quality metrics and resilience on their balance sheets.

According to Goldman Sachs, it is the quality of corporate guidance from top management in first-quarter reports that will determine whether the S&P 500 can find a true bottom at current levels.

If military actions in Iran and the effective blockade of the Strait of Hormuz stretch into June, global oil prices could surge to a dazzling $200 per barrel, analysts at Macquarie Group warn.

A team led by Vikas Dwivedi laid out two possible scenarios for the commodities market. The base case, “Quick Peace,” which analysts assign a 60% probability, assumes that the conflict ends by the end of the next month, allowing logistics to recover and prices to get back on track rapidly.

The alternative scenario, “Protracted War” (40% probability), suggests that fighting continues throughout Q2. In that case, according to the estimates of the investment bank, inflation‑adjusted oil prices could reach record highs and comfortably top $200 per barrel.

“If the strait remains closed for a prolonged period, prices will have to rise so high that they physically ‘destroy’ historically massive volumes of global oil demand,” Macquarie’s analysts state. They argue that the timing of reopening the waterway and the magnitude of actual physical damage to regional energy infrastructure will be the fundamental factors determining the long‑term fallout for global markets.

The report underlines the unprecedented scale of the current logistics crisis. The closure of the Strait of Hormuz has triggered a price shock not only in crude oil but also in refined products. Before the escalation, roughly 15 million barrels per day of crude and 5 million barrels per day of refined products transited the route. Macquarie concludes that it is physically impossible to instantly replace those volumes via alternate routes or reserve capacity. 

The American currency is on course for its best monthly showing since July 2025. The military conflict in the Middle East and the subsequent oil shock have completely upended Wall Street's scenarios, forcing the largest investment banks to urgently revise their forecasts for the primary reserve currency.

The Bloomberg Dollar Spot Index, which tracks the dollar's performance against a basket of major global currencies, soared by more than 2% in March. This unprecedented strengthening was driven by a mass flight of global investors to safe-haven assets and a sharp decline in expectations regarding an imminent cycle of interest rate cuts by the US Federal Reserve.

This represented a dramatic turn for the market. Just before the onset of hostilities, the dollar was experiencing its fourth consecutive monthly decline. The protracted geopolitical conflict caught investment banks and traders off guard, as they had been aggressively betting on further weakening of the American currency until the last moment.

A notable example is the reaction of strategists at JPMorgan Chase & Co., who officially changed their dollar forecast to bullish for the first time in a year. In the futures market, speculators also moved swiftly to close short positions and switch to long ones, despite holding their bearish trades at near five-year highs just mid-February. It is noteworthy that in January, financial giants like Goldman Sachs and Deutsche Bank entered 2026 with confident forecasts for a weaker dollar, solely based on anticipated easing of the Fed's monetary policy.

Analysts remind us that in 2025, the US dollar index lost about 8%. At that time, demand for the currency was undermined not only by three consecutive Fed rate cuts but also by Donald Trump’s aggressive tariff war. This sparked rumors of potential capital flight from dollar assets. However, paradoxically, investors continued to purchase American securities while actively hedging currency risks.

Currently, many investment firms prefer to refrain from updating their macro forecasts altogether. The dense fog of uncertainty regarding the duration of the war, risks of further escalation, and prospects for a peace agreement is prompting Wall Street to take a pause in its assessments.

BofA Securities analysts warned on March 26, 2026, that the Federal Reserve could shift back into a rate‑hiking cycle amid soaring energy prices. The escalation of the military conflict in Iran and the effective blockade of the Strait of Hormuz have created conditions for a prolonged increase in inflationary pressure in the United States.

BofA Securities expert Aditya Bhave said that tightening monetary conditions is the most likely scenario if WTI averages in the $80–100 range. On Wednesday, the Brent futures contract plunged 4.1% to $100.23 a barrel.

The disruption of tanker traffic through the key waterway, which carries about one-fifth of global oil consumption, has already driven up gasoline prices at US pumps. S&P Global business survey data shows that US industrial firms already face high additional costs for commodity purchases.

The Federal Reserve will only revert to a dovish policy if consumer demand collapses sharply as a result of a short-lived price spike. The negative impact of a prolonged sell‑off in the stock market and the threat of weakening employment will force the central bank to balance between containing inflation and supporting economic growth during the crisis. 

The current energy resource deficit in the European Union is less severe compared to the crisis of 2022. According to Bloomberg, the diversification of import channels has reduced the sensitivity of the European economy to Middle Eastern supplies compared to the previous reliance on Russian gas.

The blockage of the Strait of Hormuz and strikes on Qatar's energy infrastructure have led to rising prices at the Dutch TTF hub. Nevertheless, current gas prices remain significantly lower than the levels seen at the end of 2022. Economic analyst Lionel Laurent points out that Europe’s dependence on Middle Eastern exports is not critical for the stability of the system.

The primary damage from disruptions in maritime logistics has been observed in countries within the Asia-Pacific region. As Lionel Laurent, a Bloomberg columnist, noted, many Asian countries find themselves in a highly vulnerable position due to their energy systems' direct reliance on transit through Middle Eastern arteries. Regional markets are experiencing a deeper supply deficit than European consumers.

The supply crisis has been most acute in India, where a shortage of cooking fuel emerged in March 2026. The LNG deficit has negatively impacted the operations of hotels, restaurants, and social facilities. According to industry reports, the available reserves in the country are sufficient only to meet minimal needs until the end of April 2026.

Fresh business surveys issued on March 24, 2026, confirmed a synchronized macroeconomic shock on a global scale. Purchasing managers’ indices (PMIs) registered a sharp fall in major economies, driven by a decline in commodity supplies and rising logistics costs due to the military conflict in Iran.

The euro area’s composite PMI worsened more than markets had expected, and manufacturing activity in India hit its weakest level since 2021. “An incipient recovery will be suppressed by the combination of higher oil prices, tighter financial conditions, and fading business confidence,” Jamie Rush, head of global economics at Bloomberg Economics, said.

The ECB and the Bank of England have shifted rhetoric toward hawkish vigilance to curb inflation expectations amid the energy crisis. The European Central Bank is considering a rate hike in April 2026, while the Bank of Japan does not rule out a similar move to stabilize the financial system.

Forecasts point to greater resilience in the US manufacturing sector compared with European and Asian markets. The key factor shaping macro dynamics in 2026 will be the duration of the Strait of Hormuz blockade and how quickly monetary authorities can counter the effects of a sharp rise in oil prices.

On March 26, 2026, European Council President Antonio Costa characterized the current state of the European Union’s economy as a “very strong economic shock.” The escalating instability in the Middle East has triggered a sharp rise in energy prices and set the stage for a potential new migration crisis in the region. 

According to Antonio Costa’s statement, Brussels has begun immediate preparations for a potential influx of refugees amid ongoing hostilities. The prolonged conflict in Iran poses a threat to the socio-economic stability of member states and necessitates an urgent reassessment of budget priorities to secure borders. 

The European Central Bank has initiated an emergency risk assessment in the banking sector related to the Middle East crisis. The regulator is requesting liquidity data and changes in customer behavior from credit institutions. Particular attention is being paid to direct financial obligations that may be affected by the blockage of trade routes and declines in business activity.

The recent spike in natural gas prices has forced officials to acknowledge that European production is facing an inevitable major setback. Earlier, EU authorities had denied the direct impact of commodity market volatility on the bloc’s macroeconomic indicators. However, current price trends suggest a risk of a prolonged recession in key industrial sectors across Europe.

On March 26, 2026, China’s Foreign Ministry spokesperson Lin Jian called on the European Union to assess China’s economic growth rates objectively. Beijing insists on abandoning protectionist barriers and adopting a rational approach to bilateral relations.

China seeks to transform its role in the global system, acting both as the “world’s factory” and as the largest consumer market. “European partners should jointly leverage the economic opportunities embedded in the forthcoming 15th Five‑Year Plan,” Lin Jian said, urging collaboration. China’s government advocates for creating a predictable and balanced investment environment.

In 2025, bilateral trade grew by 5.4%. The total turnover of goods between China and the EU reached $828 billion. Such statistics refute fears of a massive influx of Asian goods into Europe following US‑imposed tariffs.

China calls for an open trade and economic architecture based on mutual benefit. The strategy aims to stabilize international logistics chains over the long term and support balanced market development. Beijing underscores the importance of dialogue to prevent trade conflicts and to ensure sustainable global growth amid geopolitical turbulence. 

Bitcoin resumed gains on March 24, 2026, after President Donald Trump decided to postpone strikes on Iran’s energy infrastructure for five days. Bloomberg reported that the flagship cryptocurrency briefly reached $71,500 in response to Washington’s softening geopolitical rhetoric.

The cryptocurrency showed high volatility after falling to a two‑week low of $67,470 during the Asian session. Smaller tokens, including Ethereum and Solana, also posted gains following the flagship crypto. Earlier, Bitcoin had peaked near $76,000 before correcting amid a fresh wave of Middle East tensions.

S&P 500 futures jumped almost 3% while Brent crude eased to $101 a barrel. The price moves coincided with a sharp reversal in US Treasury yields after reports of efficient diplomatic contacts. Improved risk sentiment partially offset stock market losses posted earlier in the week.

Flows into US ETFs turned into outflows on Monday amid lingering uncertainty. As Laser Digital analysts noted, the resumption of shipping through the Strait of Hormuz remains the key catalyst for a durable consolidation of interest rates. The current stabilization in the crypto market is fragile and depends directly on definite steps to de‑escalate military presence. 

On March 23, 2026, former US presidential advisor George Papadopoulos stated that Washington is interested in investing in the Nord Stream pipelines. According to him, energy cooperation between the states will be restored immediately after the official lifting of existing sanctions.

The projects have a combined capacity of 110 billion cubic meters of gas annually. "The Nord Stream and Nord Stream 2 pipelines, I think, are extremely important and very interesting projects for potential US investments," George Papadopoulos noted.

The infrastructure in the Baltic Sea remains non-operational following extensive damage in September 2022. The Nord Stream AG operator describes the damage to three pipelines as unprecedented, making it impossible to establish exact timelines for repairs without conducting additional engineering surveys.

The investigation into the incidents along the pipeline is ongoing, with authorities not ruling out the possibility of deliberate sabotage. The Prosecutor General's Office of Russia has initiated a criminal case regarding an act of international terrorism. The future operation of the facilities directly depends on the willingness of Western financial institutions to participate in the technological modernization of the damaged maritime hubs.

The single European currency has shown resilience to external shocks thanks to a shift in market structure and reduced dependence on crude oil prices. According to a report from BofA Global Research, the ongoing euro’s performance is fundamentally different from the crisis of 2022.

Under the new financial paradigm, a currency’s valuation depends directly on natural gas prices, while oil’s influence has become statistically insignificant. Despite military tensions in the Middle East, the European gas market has maintained stability. That supports spot euro’s market quotes against a basket of G10 currencies and has prevented a large sell‑off.

Short‑term pressure in the currency options sector is driven by market positioning specifics rather than a deterioration in the eurozone’s energy fundamentals. Current euro’s selling runs counter to the capital flows seen at the start of 2026. Institutional investors attribute recent weeks’ volatility to technical factors rather than a genuine economic downturn.

Gas stocks in storage remain below seasonal norms, but gas prices avoided sharp spikes. This has helped avoid market panic. The euro’s further trajectory will depend on the euro zone’s ability to replenish reserves without triggering negative price dynamics. Traders are now focused on monitoring the energy balance as the main driver of the currency risk premium. 

Capital spending on artificial intelligence development will remain the main driver of global economic growth in 2026. According to a new macroeconomic report from BofA Global Research — the first in the “AI Matters” series — investments in AI infrastructure will add roughly 0.4 percentage points to US GDP growth this year. However, analysts caution that the economic contribution of these technologies may begin to fade in 2027, although aggressive budgets at hyperscale IT firms could prompt upward revisions to short‑term forecasts.

The global investment cycle has long since moved beyond the US market. The United States and China are fiercely competing for dominance in the sector, using fundamentally different economic models. Washington retains an edge by fostering advanced models that leverage dynamic private capital and a deep research base. Beijing, by contrast, relies on state‑led scaling, cheap electricity, and tight central control over critical minerals needed for hardware production.

The main beneficiaries of this superpower race are key nodes in the global supply chain. BofA maintains a strong forecast for Taiwan’s GDP growth of about 8% in 2026, calling the expansion of the AI sector the island’s primary economic catalyst. Despite geopolitical tension in the region, global demand for high‑tech semiconductors remains buoyant. Structural gains from redirected capital flows are also accruing to Mexico and South Korea, which are becoming increasingly integrated into the production of data‑center hardware. The economic effect of neural networks is no longer a local Silicon Valley phenomenon.

As the initial phase of infrastructure investment wraps up, attention shifts to assessing real productivity. BofA analysts note that the second stage of the cycle will show whether AI sparks a fundamental transformation in the labor market or mainly delivers gradual business process improvements. Success will depend on the speed with which new tools are adopted across the corporate sector.

While risks of widespread job losses remain in some industries, the report’s authors stress that a severe “skills challenge” will be the defining global trend of the late 2020s, determining national competitiveness.

Experts suppose that the peak of the AI investment cycle has not passed yet. Capital continues to flow into data‑center construction and specialized chip development. In this environment, investors are focusing on advanced economies capable of maintaining their role as indispensable nodes in the new global technological architecture.

Investment bank Goldman Sachs has raised its oil price forecasts for the second time in less than two weeks. The key factors behind this upward revision are prolonged disruptions in shipping through the Strait of Hormuz and rising structural risks to global supply chains.

According to the bank's updated baseline scenario, transport volume through the Strait of Hormuz will remain at only 5% of normal levels for the next six weeks, followed by a gradual recovery in traffic over the subsequent month. This extended logistical disruption, combined with the high concentration of global production and reserve capacity, fundamentally changes market dynamics.

"A recognition of the risks from the high concentration of production and spare capacity is likely to lead to structurally higher strategic stockpiling and long-dated prices," Daan Struyven, head of global commodities research at Goldman Sachs, noted.

In the short term, the bank expects the price rally to continue amid ongoing uncertainty. According to Struyven, quotes will rise until the market is convinced that a long-term shortage is unlikely. To curb demand and hedge against potential supply shortages, the market will require a "growing risk premium."

With new inputs considered, Goldman Sachs anticipates that the average price of Brent crude will reach $110 per barrel in March and April, up from a previous forecast of $98. This represents a sharp increase compared to levels in 2025.

The revision also impacted long-term benchmarks. The bank raised its average Brent price forecast for 2026 from $77 to $85 per barrel, expecting WTI to reach $79. Analysts explain that these changes reflect a deeper depletion of commercial inventories and a reassessment of effective reserve capacities in light of adapting to new geopolitical realities. Notably, just two weeks earlier, on March 11, Goldman had already increased its Q4 2026 forecasts for Brent and WTI from $66 and $62 to $71 and $67, respectively.

Looking ahead to 2027, the bank predicts an average Brent price of $80 but emphasizes significant risks of exceeding this threshold. In extreme scenarios where flows through Hormuz remain severely constrained for an extended period, daily Brent prices could surpass their historical highs posted in 2008.

In a "severely adverse scenario," which assumes a sustained loss of Middle Eastern supply, oil prices could spike sharply before stabilizing around $115 per barrel by the end of 2026.

Global exports of liquefied natural gas (LNG) have fallen to their lowest levels in the past six months. The recent increase in global supply, supported by the introduction of new production capacities in the US and other countries, has been completely overshadowed by the escalation of the military conflict in the Middle East.

According to shipping tracking data from Kpler, the 10-day moving average for LNG shipments has fallen by around 20% since the start of the month, dropping to 1.1 million tonnes. This is currently the lowest figure recorded since September last year.

Statistics indicate that the sharp decline in export deliveries is primarily driven by a logistics crisis in Qatar and, to a slightly lesser extent, in the United Arab Emirates. To deliver fuel to key buyers in Asian and European markets, LNG carriers from these countries must navigate the strategically important Strait of Hormuz. In the current conditions, commercial shipping in this waterway is effectively paralyzed.

Global LNG production showed steady and continuous growth throughout the past year, largely driven by the launch of new export projects in North America (the US and Canada). However, this positive trend has now been completely negated by the physical loss of Qatari volumes due to the transport blockade in the Persian Gulf.