Ten days into the war in Iran, global markets are no longer moving as one.

Instead, investors are drawing a sharper line between winners and losers based on one variable above all others: energy exposure.

The conflict, which began on Feb. 28, 2026, has triggered attacks across Iran, Israel and several Gulf states, while also disrupting oil infrastructure, shipping routes and broader business activity across the Middle East. As of March 9, 2026, the war is still reshaping global asset prices through higher oil volatility, rising inflation fears and a widening gap between energy exporters and energy importers.

Oil Price Volatility Is Driving Global Market Leadershi

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Oil has become the market's main transmission channel.

On Monday, crude posted one of its most violent trading sessions since the pandemic shock of 2020. Reuters reported that prices briefly surged toward $119–$120 per barrel as traders reacted to the risk of deeper supply disruptions, before pulling back sharply later in the session. The swings came as investors weighed possible emergency responses from Washington and the G7, including a potential release of strategic reserves and even the possibility of easing sanctions on Russian oil to bring more supply back to market.

That price action matters far beyond the energy complex.

The war has already forced production cuts and logistical disruptions across the Gulf. Reuters reported that Saudi Aramco has begun reducing output at two oilfields, while other regional producers, including Kuwait, Qatar, Iraq, the UAE and Bahrain, have also faced disruptions tied to drone attacks, storage problems or shipping paralysis.

Even where traffic may be partially resuming, the broader message for markets is clear: energy flows are no longer secure. Trump said in a CBS interview that ships are now moving again through the Strait of Hormuz, but at the same time Reuters and other outlets continue to describe the route as severely disrupted and central to the current oil risk premium.

Trump Says The War Is "Very Complete," But The Market Says The Crisis Isn't Ove

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President Donald Trump told CBS News that the war against Iran is "very complete" and ahead of schedule, pointing to the degradation of Iran's navy, air force and communications systems. Yet developments on the ground suggest that markets are right to remain cautious. Fighting and retaliatory strikes have continued, with new attacks reported across Gulf states and fresh concern over regional energy infrastructure.

Among the latest developments as of March 9:

• Saudi Arabia said it intercepted drones targeting the Shaybah oil field.
• Bahrain reported injuries after an Iranian strike and an apparent fire at its only oil refinery.
• Reuters reported that broader trade and industrial flows are being disrupted, including shipments of bauxite and alumina that were diverted because of the Hormuz blockage.
• J.P. Morgan warned that any move against Kharg Island, which handles most of Iran's crude exports, could trigger an even larger oil shock.

For investors, that means the war is no longer just a geopolitical headline. It has become a macro regime driver.

US Sector Performance Since The Start Of The Iran Wa

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Using data from our US Sector & Industry ETFs Performance Tracker and measuring from the Feb. 27, 2026 close — the last session before the conflict began — a clear pattern has emerged: relative winners are concentrated in sectors with either pricing power, structural growth, or direct commodity leverage.

Top 5 Performing US Sector

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Worst 3 Performing US Sector

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Technology's resilience reflects the market's preference for companies with high margins, low direct energy intensity and secular growth characteristics. Energy, meanwhile, remains an obvious beneficiary of higher crude and refined product prices.

Materials and staples, by contrast, are being squeezed by the combination of input-cost pressure and weaker risk appetite. That pattern fits the broader macro narrative now building in rates and FX markets, where investors are increasingly pricing the conflict as an inflationary shock rather than a simple growth scare. Reuters reported Monday that oil's surge was already pressuring currencies and pushing bond yields higher in energy-importing economies.

Industry ETFs Show A More Aggressive Rotatio

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At the industry level, the divergence is even more pronounced.

Top 5 Performing Industrie

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Software has emerged as the strongest pocket of the US market, suggesting that investors still view high-quality digital businesses as relatively insulated from commodity shocks.

Exploration and production stocks are also outperforming, which is consistent with the move in oil. Midstream and energy infrastructure names are holding up as well, reflecting expectations that any prolonged supply disruption could support transport, storage and pipeline economics.

Worst 5 Performing Industrie

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Airlines and transportation are among the clearest casualties of the oil shock, as fuel-sensitive business models are immediately hit by rising input costs.

Gold miners are a more interesting case. In a normal geopolitical panic, the group might have been expected to outperform. But in the current environment, the market is treating the war primarily as an energy-driven inflation event, which can lift yields and complicate the case for traditional safe-haven equities.

Country ETFs Are Splitting Along The Energy Lin

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If US sectors tell part of the story, country ETFs tell the full one.

Since the war began, performance has increasingly reflected whether an economy is a net energy exporter or a net energy importer. That framework is becoming one of the most useful ways to interpret cross-country market behavior during the crisis.

Top 5 Country ETF Performer

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Worst 5 Country ETF Performer

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Saudi Arabia's relative strength is intuitive: higher oil prices support fiscal revenues, corporate earnings and external balances. Norway fits the same broader logic.

South Korea and Thailand, on the other hand, are classic examples of economies vulnerable to energy-import inflation. Reuters reported Monday that currencies and rate expectations are already moving in ways that punish energy-dependent economies more severely as oil surges.

Israel's outperformance is more idiosyncratic. Despite being at the center of the war, its ETF has held up on expectations tied to defense technology, strategic support and the possibility that investors are already looking beyond the immediate conflict toward post-war normalization and reconstruction.

Why Energy Trade Balances Matter More Than Eve

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This is the core investment framework behind the current divergence.

When oil and gas prices spike, energy exporters typically benefit from stronger trade balances, improved fiscal revenues and often firmer currencies. Energy importers face the opposite: deteriorating terms of trade, higher inflation, weaker margins and slower growth.

That is why broad international diversification is not enough in this environment. Investors need to understand which countries import the shock and which countries export it.

Our Iran War Market Monitor tracks this in real time through the lens of energy trade balance as a percentage of GDP, a metric that becomes especially powerful when energy prices are setting the macro tone.

Investment Implications For ETF Investor

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This war is creating a market where selection matters more than beta.

Energy exposure remains the most direct way to express a bullish view on prolonged disruption. ETFs such as the Energy Select Sector SPDR ETF (XLE) and SPDR S&P Oil & Gas Exploration & Production ETF (XOP) remain the clearest equity vehicles for that theme.

High-margin technology is acting as a second relative winner. The strength in the iShares Expanded Tech-Software Sector ETF (IGV) suggests that parts of software are being treated as secular growers with limited direct exposure to commodity volatility.

Country allocation may prove even more important than sector allocation. In a persistent oil shock, markets such as Saudi Arabia may continue to screen better than large importers such as South Korea or Thailand.

Traditional hedges are not behaving in textbook fashion. The weakness in gold miners is a reminder that geopolitical stress does not always translate into a straightforward safe-haven trade when inflation and rates are simultaneously repricing.

Monitor The Crisis Impac

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Track real-time developments using our comprehensive tools:

• Compare country ETF performance across energy exporters vs importers
• View sector valuations to identify oversold opportunities
• Check seasonality patterns for historical crisis performance
• Analyze correlations between energy prices and country ETFs

Final Take: The Iran War Is Redrawing The Global ETF Ma

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Ten days into the war in Iran, the most important market signal is not simply that volatility has risen. It is that leadership has changed.

Oil's violent swings, ongoing attacks on Gulf infrastructure, production cuts and continued uncertainty around the Strait of Hormuz have created a new cross-asset hierarchy. Reuters, AP and other outlets reported on Monday that the conflict is still disrupting business flows, energy infrastructure and regional supply chains, even as Washington considers emergency steps to contain the price shock.

For investors, the lesson is straightforward: during a geopolitical energy shock, broad exposure matters less than knowing exactly what you own.

The winners are increasingly concentrated in:

• energy-linked equities,
• high-margin growth industries,
• and countries with positive energy trade balances.

The losers are those most exposed to imported energy inflation and margin compression.

That makes granular ETF selection , not passive diversification, the more important strategy in this phase of the crisis.

FA

Q

Which US sectors are performing best since the start of the Iran war?

Based on our tracker data, Technology (XLK) and Energy (XLE) are the strongest US sectors since the Feb. 27 close, with software and oil exploration leading at the industry level.

Why are country ETFs diverging so much?

Because the war has become an energy shock. Countries that export oil and gas benefit from higher prices, while importers are hit by inflation, weaker trade balances and growth pressure. Reuters' market coverage on March 9 showed the same pattern across FX and rates markets.

Is the Strait of Hormuz still a market risk?

Yes. Even if some shipping resumes, the route remains a major source of uncertainty. Reuters continues to describe severe disruption, and fresh attacks on energy infrastructure across the Gulf are keeping the risk premium elevated.

Which ETFs look most directly exposed to the oil shock?

Among US-listed ETFs, the Energy Select Sector SPDR ETF (XLE), SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and energy-exporter country funds such as the iShares MSCI Saudi Arabia ETF (KSA) stand out as the clearest expressions of sustained energy disruption.