Market Immunity: How Global Finance Is Adapting to the Crisis in Iran

When a conflict enters its active phase, a state described as “information saturation” sets in. Investors conclude that the worst-case scenario has already materialized and been priced in. From the perspective of rational expectations theory, any news about the preservation of diplomatic channels (even amid ongoing hostilities) is perceived by the market as a positive signal, triggering the closing of short positions and a resumption of buying.

A significant shift in the behavioral patterns of market participants is being observed. The historical experience of volatility in recent years (including the COVID-19 pandemic and the events of 2022) has formed a conditioned reflex among investors to buy short-term dips.

Panic selling is now viewed not as a signal to flee into safe-haven assets (gold, U.S. Treasury bonds), but as an opportunity to reallocate capital into undervalued technological assets. Economic determinism is displacing political fear: market participants assume that global liquidity will ultimately neutralize local geopolitical shocks.

Traditionally, conflict in the Persian Gulf led to uncontrolled spikes in energy prices. However, under current conditions, we observe the effect of an “oil cushion.” This is driven by three factors: supply diversification (the global energy map has become more fragmented, reducing critical dependence on the Strait of Hormuz); interventions from strategic reserves (the use of government oil stockpiles (SPR) effectively smooths peak Brent and WTI price levels); demand elasticity (concerns about a global economic slowdown preemptively restrain speculative oil price growth, creating a kind of “natural cap”).

Despite macroeconomic instability, the microeconomic performance of major issuers (especially those in the S&P 500 index) demonstrates extraordinary resilience. According to statistical data, the overwhelming majority of companies exceeded conservative analyst forecasts in the first quarter of 2026.

High business margins allow the corporate sector to absorb costs associated with more complex logistics and rising borrowing expenses. It is precisely strong quarterly earnings reports that serve as the real foundation preventing stock indices from collapsing, shifting investor focus from military briefings to profit-and-loss statements.

The high-tech sector deserves special attention. The development of artificial intelligence (AI) systems has created an autonomous growth cycle weakly correlated with geopolitics. Investments in the semiconductor industry (notably in giants such as TSMC, Samsung, and SK Hynix) have taken on the character of a “technological arms race.”

The exponential revenue growth of chip manufacturers and AI solution developers generates excess liquidity that flows into adjacent sectors. In this context, technological progress acts as a powerful countercyclical factor outweighing the risks of regional destabilization.

Thus, we are witnessing a structural transformation of the global market. Whereas in the 20th century a geopolitical crisis of this magnitude would inevitably have led to a prolonged depression, today the market demonstrates a high degree of cynical adaptability. Markets have developed an “immunity” to bad news. This is a dangerous trend, as it may lead to the underestimation of systemic risks (such as nuclear escalation or the complete closure of trade routes).

The enormous volume of money accumulated in the system requires allocation. In the absence of alternatives, the stock market remains the only effective mechanism for preserving capital, which supports prices despite security logic.

Technology-driven growth based on AI appears sustainable only as long as companies confirm their revenues with real cash flows. Current reports from TSMC and Samsung inspire optimism; however, overheated expectations in this sector remain the main internal risk, which could materialize faster than external threats from Iran.

Therefore, global markets are holding up not because of faith in imminent peace, but due to a combination of aggressive belief in technology, excess liquidity, and habituation to a state of “permanent crisis.” This creates an illusion of stability that nevertheless requires careful monitoring at points of extreme tension (such as the Strait of Hormuz or the Taiwan issue).

Author: PhD in Economics, Associate Professor of the Department of World Economy and World Finance at the Financial University under the Government of the Russian Federation Natalya Ivanovna Chovgan.