"More expensive than war": The global economy: A roadmap to survival that investors should know.

The fierce oil war between the United States and Iran continues into its second week since the US-Israeli missile attack on Tehran on February 28, underscoring the fact that the world remains under the influence of the United States. (The text then continues with a separate, unrelated statement about President Iran's actions.) "Donald Trump" Dragging Israel into the destruction of the old world order in the hope of creating a new world order in the world's largest oil-producing region.

This was the cause of the oil price skyrocketing to nearly $120 per barrel on March 9th.

The financial world was left breathless when a war broke out within days. Will the stock market become more volatile? Should we halt investing for now? Before making any decisions, I suggest we look at how this event affects the market.

Ten-day Iran-Iran conflict sends oil prices soaring 70%; Federal Reserve expected to keep interest rates unchanged.

Investors worldwide are already anticipating the worst-case scenario if the war drags on, the impact... "Oil prices are soaring." This is a major risk that could trigger a rapid global inflationary surge, with the impact spreading to the global economy. Therefore, the viewpoint regarding monetary policy at this time will not differ from what has been previously anticipated.

Last year, the market expected the Federal Reserve (Fed) to cut interest rates twice in 2026, which didn't account for the risk of soaring oil prices resulting from Trump's actions initiating a conflict in the Middle East.

The volatility in global oil prices intensified in the first week of March. Brent crude prices suddenly jumped to approximately $80-83 per barrel, an increase of about 10-15% from pre-war levels of around $70 per barrel.

The second week entered a period of heightened tension, with global concerns about a prolonged war. Amid intense fighting, oil prices surged to a high of $119.5 per barrel on March 9th, a nearly 70% increase compared to pre-war levels. Global investment markets plummeted, with bonds and stocks falling sharply, most notably the Dow Jones which plunged nearly 1,000 points. Even gold prices plunged.

But on the same day, Trump announced... "The war with Iran is nearing its complete end." The price plummeted to around $92 per barrel, a drop of about $28 or 20-25% from its peak the same day. This is considered one of the most volatile phenomena, almost impossible to occur (a 1 in 3.5 million chance, known as 5 sigma), and besides shocking the oil world, it also caused global stock markets to rebound sharply, easing concerns about an energy crisis. The markets had just passed through an extreme risk-off phase.

"Is this war really over, or is it just a temporary halt?" Because of the history of the Middle East, many times... "The end of one war." This could be the beginning of another kind of power struggle.

The world remains vigilant, even though this war has ended, because of what lies ahead. "How will the balance of power in the Middle East shift?" Because this answer could determine the energy market, the global economy, and the direction of financial markets in the years to come, everyone still needs to monitor the situation closely.

But one thing is certain: today, the United States is burning $900 million a day in fueling a war with Iran (data from the Center for Strategic and International Studies or CSIS). Analysts also estimate that if the US continues the war with Iran, the cost could skyrocket to $2.1 billion. Iran has warned that oil prices could surge to $200.

things "More expensive than the war." This is the real cost of the global economy. Energy prices, including oil, gas, and LNG, are impacting global inflation, interest rates, the US dollar, and the US economy itself, as well as volatility in bond markets, stock markets in various countries, gold, cryptocurrencies, and other assets.

The market is watching for signals regarding the Federal Reserve's (Fed) monetary policy outlook as it begins on March 17-18.

Most analysts expect the Fed to... "Keep interest rates unchanged." To await economic data, and still expecting interest rates to remain unchanged for the second consecutive meeting, which is still a period where... "Jerome Powell" The Fed chairman is still in office before the end of May and will pass the baton. Kevin Warsh The new Fed chairman, who will take office in June, will face pressure from two sides: the president's desire to lower interest rates and inflationary pressure from the war, which could force interest rate hikes if inflation falls outside the 2% target.

3 Reasons Why the Fed Is Unlikely to Cut Interest Rates

Analysts estimate that the Fed is unlikely to...

1. Inflation remains a high risk, particularly due to energy prices amid the Middle East conflict, making the Fed cautious about a potential resurgence of inflation.
2. The US economy is not yet very weak, especially the labor market which remains strong. The Fed may see no need to rush into cutting interest rates.
3. The Fed has cut interest rates several times since 2025. Currently, interest rates are at 3.50 – 3.75%. After several previous rate cuts, the Fed wants to see the effects of its interest rate policy on the U.S. economy before making any further decisions.

The market expects the Fed to have its first rate cut in 2026, around June or July, and possibly 1-2 cuts throughout 2026. This coincides with the new Fed chairman taking over in June.

However, today, the ongoing conflict with Iran has diminished expectations of a US interest rate cut, as rapidly rising oil prices have pushed US inflation above the target of 2%. It remains to be seen whether monthly inflation figures and oil price movements will remain at high levels throughout the year.

US bond and stock markets are volatile as the dollar strengthens.

During the US-Iran conflict, global financial markets experienced a risk-off sentiment. Investors sold risky assets, particularly stocks, and shifted to oil, the dollar, and other safe-haven assets.

Let's take a look at the movements in the world's major stock markets.

US stock markets immediately fell following news of the war, with the Dow Jones index dropping more than 1,000 points, or 2.3%, the S&P 500 falling approximately -2.1%, and the Nasdaq dropping approximately -2.4%.

Most European stock markets fell by 1–2%.

Asian stock markets were heavily impacted due to their high dependence on Middle Eastern oil. In Japan, the Nikkei index plummeted by more than 6-7%, while in South Korea, the KOSPI index experienced a sharp drop, triggering a circuit breaker and falling more than 16% since the start of the conflict. Similarly, the Thai stock market experienced a sharp decline, triggering a circuit breaker and falling by more than 10%, before global markets rebounded significantly on the day of the news that Trump had declared the war with Iran nearing its end. However, concerns remain about the illusion that the war will truly end, as there is no definitive answer at this time.

Global bond markets experienced a sell-off, causing yields to rise (and bond prices to fall), led by the relatively volatile US bond market. "Abnormal" Yes

Typically, during wartime, investors buy US bonds because they are considered the safest asset, causing yields to fall (and bond prices to rise).

However, what's unusual is that the Iran-Iran conflict has led to significant selling pressure on US bonds, causing yields to rise. The 2-year bond yield has climbed to around 3.6%, an increase of about 4 basis points, while the 10-year bond yield has risen to approximately 4.16% and is trending upwards.

So why is there a sell-off in bonds despite the war? There are three main reasons.

1. Oil prices have surged due to the war, impacting inflation and raising the risk of a rebound. Therefore, interest rate cuts are becoming less likely.
2. The market has lowered its expectations of further Fed interest rate cuts. Before the war, the market anticipated multiple rate cuts by 2026, but now there's growing concern that high energy prices and inflation may slow down the rate cuts, causing yields to rise.
3. The risk of “stagflation fear” means the market fears high oil prices and an economic slowdown, leading to stagflation.

The market is currently watching two of the most key variables.

The first variable is the price of oil, such as Brent crude oil. If oil prices rise significantly, it will greatly impact inflation, making it more likely that the Fed will cut interest rates more slowly.

The second variable is the 10-year US Treasury bond yield. If the yield rises significantly (bond prices fall), it reflects that the Fed will not cut interest rates quickly.

If we assess the situation in the case of oil... "Stop going up." And declining, the bond yield trend may reverse downwards. The market is starting to play on the theme of the Fed cutting interest rates. If oil prices continue to rise, such as to $120–150 per barrel, the 10-year bond yield trend may rebound to 4.3–4.5%. Global stock markets will be under more pressure.

Navigate the market with a well-structured investment plan and stay in the market for the long haul.

The question is, would a war really cause the stock market to crash?

In recent years, the world has faced several major events, such as the US-China trade war, the Russia-Ukraine conflict, the Israeli-Hamas conflict, and the US-Iran tensions.

But looking at the long term, the S&P 500 index has still grown by more than +238.69% over the past 10 years (January 4, 2016 – March 3, 2026).

Because every time these events occur, the stock market tends to fluctuate and decline initially, and then as market concerns gradually subside, the market will return to growth based on sound economic fundamentals.

Legendary global investor "Grandpa Warren Buffett" I once said that... "The one thing investors shouldn't do during wartime is 'hold cash'." Because in the past, wartime was often accompanied by inflation, holding only cash could reduce the value of money.

So, if you're worried about the current situation, the most important thing is... "It may not be a matter of rushing to sell assets from the portfolio."

But it's about regaining composure and reviewing your long-term investment plans, because often, times when the market is filled with anxiety are also the most volatile.

Believe it or not, the US stock market experienced smaller declines than Asian markets during times of war. The main reason is that the US dollar was considered a safe-haven currency at that time, and US stocks constitute the world's largest market, with the S&P 500 accounting for 60% of the global market and including world-class technology companies. Investors therefore maintained a significant weighting in US stocks within their portfolios, although they might adjust their holdings based on the level of risk to the US itself at that particular time.

Historical data from the past 151 years shows that the S&P 500 has risen more often than it has fallen. While we can't predict which years will see increases or decreases, holding an index for more than 10 years offers a near 100% chance of profit. In other words, the longer you hold, the more you profit.

The best investment strategy in a highly volatile world is to have a clear investment plan.

• Build a Core & Satellite portfolio, where the Core portfolio comprises over 50% and focuses on global diversification across bonds and equities in developed countries like the US, Europe, and Japan. The Satellite portfolio should be used for targeted investments such as promising assets like gold, emerging markets, specific sectors like defense stocks or arms manufacturing, AI technology stocks, advanced semiconductor stocks, clean energy stocks, defensive stocks, and undervalued value plays.
• A properly rebalanced portfolio overcomes emotions by selling assets that exceed the target proportion and adding assets that are underbalanced.
• Invest using a disciplined DCA (Dollar Cost Averaging) approach. If you have funds available to add to your portfolio, proceed with your investment as scheduled. You will have a better cost basis than the market and experience less volatility, as market fluctuations are caused by the war, not by poor fundamental factors.

Warren Buffett's mantra still holds true: "Be fearful when others are greedy; be courageous when others are fearful." Or to put it simply... "Don't follow the crowd."

Many global investors agree that: "The most important thing in investing isn't predicting the market correctly, but staying in the market long enough."

To be a successful investor and build a growing portfolio to meet your goals, you need to pay attention to and understand the assets you hold, stay informed, and review your portfolio to ensure it's still based on sound investment principles. If you're unsure what to do, you can talk to an investment expert. My team and I at Jitta Wealth are happy to provide advice.

"Markets are always volatile. The most important thing in investing isn't predicting the market correctly, but staying in the market long enough. This will allow your portfolio to grow sustainably in the long run."