Amid the ongoing Middle East crisis that has rattled markets, American banking giant JPMorgan is urging investors to treat rising tensions with Iran as a buying opportunity rather than a signal to retreat from equities.
In a note to clients, strategist Mislav Matejka advised using short-term market weakness to add positions, arguing that the current conflict is likely to prove temporary.
He expects any spike in oil prices to fade once tensions ease, limiting broader economic fallout.
Markets have been volatile following Israel’s missile strike on Tehran around June 13, which triggered a global equity selloff.
Concerns have focused on potential disruption to the Strait of Hormuz, a key artery for global energy flows that carries roughly 30% of seaborne oil and 20% of liquefied natural gas shipments.
Impacts of conflict escalation
JPMorgan’s base case assumes the conflict will not escalate into sustained infrastructure damage or a prolonged closure of the waterway. Under that scenario, the bank expects oil fundamentals to remain soft, with Brent crude averaging about $60 per barrel in 2026.
A more severe escalation could push Brent above $100, adding an estimated 0.3 to 0.4 percentage points to U.S. inflation and complicating Federal Reserve rate-cut plans amid stagflation risks. However, the bank does not view that as its central outlook.
Matejka maintained that global economic fundamentals remain intact and inflation pressures should stay contained. He added that much of the valuation reset in technology and artificial intelligence stocks has already occurred, limiting further downside.
Against this backdrop, JPMorgan continues to favor international equities, particularly in emerging markets and the Eurozone, where valuations appear more attractive relative to the United States.
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Source: https://finbold.com/banking-giant-issues-ideal-investing-strategy-for-iran-crisis/
