Analysts and investors have once again laid out on their tables the board of the new post-Trump world that had not had time to gather dust on the shelf during the first year of his second term in office. This time, the war unleashed in Iran seemed to be more than just the classic rhetorical bluster of the president, and investors entered a brief panic whirlwind, with oil at the epicenter. At this point, there are three open scenarios: a quick war, a conflict that lasts a few more weeks, or, worst of all, a permanent closure of the Strait of Hormuz for months. At this stage, fund managers are preparing for the worst, although the reality is that they are hoping for the least bad scenario.
In the early days of the war, sales focused on the most cyclical sectors and on anything that could suffer the consequences of a new disruption in the supply chains. "One good thing about having lived through so many crises in recent years is that the market is battle-hardened. We have survived so many things... that it makes us put everything into perspective," says José Ramón Iturriaga, a Spanish stock manager at Abante. The declines in Europe have been concentrated in automakers - facing their own particular via crucis between tariffs and the Chinese electric vehicle -, consumer goods, materials and construction, travel and leisure, or chemicals. Who are the clear winners? Oil companies that are producers, benefiting directly from higher oil prices; and the defense sector, which has surged over 70% in Europe since Trump became president.
Undoubtedly, it is easy to give an opinion from the sidelines when you are not invested, but managers identify these volatile moments as buying opportunities, and this time is no different. Nevertheless, fear is free, especially on days when it seems that everything could collapse, especially because there has been nowhere to take refuge. "Very few assets have acted as such. The fall of everything (stocks, bonds, and gold) has been highly correlated, and even investors who tried to protect their portfolios have suffered losses," recalls Gonzalo Recarte, CEO of Cobas AM. But the reality, beyond the intrinsic volatility of oil, shows that in the first 10 days of the conflict, when nervousness peaked in the early hours of Sunday to Monday, the main indicators measuring fear never reached panic levels. For example, the Baltic Dry Index - which measures the cost of shipping goods such as coal, iron, or agricultural grain by sea - has fallen by 13%, to February levels, nothing serious. At the moment, it does not anticipate an economic recession. Another indicator is the Geopolitical Uncertainty Index - based on news published by the media - which would need to triple its current level to approach the highs experienced during Donald Trump's Liberation Day in April 2025 when he announced his new tariff policy.
Goldman Sachs, in a report prepared after the first week of war, gave a 30% probability of a stock market correction exceeding 20% in 12 months, or if the drop was 10% in the next three months. And one more data point... the VIX, which measures S&P 500 volatility, is trading at half the level it was in April of last year.
Santiago Rubio, director of investment strategy at CaixaBank AM, understands that "the self-interest of all parties involved indicates that it is reasonable to seek a quick resolution, although relying on reason is not always the best guide in these types of conflicts". The truth is that, despite the data, some things are happening. One of them has to do with the price of oil. While the war could end tomorrow if the US and Iran wanted it to, managers see it as a more reasonable possibility for black gold to trade at higher levels for a while. And there are reasons to believe this. Bank of America reveals that during the last quarter of 2025, fund managers began loading their portfolios with more energy-related companies, which had been severely punished in the market; and they had reduced their gold holdings, with a net position dropping from the 81st percentile to the 51st, approximately one-third less.
Cobas AM, with value manager Francisco García-Paramés at the helm, has also taken this path, with 30% of its portfolio in energy, services, natural gas infrastructure, and oil and gas producers, with valuation models that consider Brent barrel prices around $60-65, when it is currently about $30 above that. The asset manager is one of the few that has been advising to exit the defense sector for several quarters, not because they do not see potential in it, but because they believe that after the surge of the past year, there are other sectors offering better opportunities. Which ones? In Spain, Recarte acknowledges having entered Meliá Hotels and maintaining his bet on Técnicas Reunidas or the concessions sector with Sacyr.
On the other hand, Santander AM explains that their central scenario is one of a continuing cycle, although perhaps with a certain premium on Brent prices, up to $75 per barrel. Tomás García-Purriños, senior analyst of Asset Allocation at the asset manager, acknowledges that they consider all possible scenarios, such as a longer conflict leading crude oil to $90 for a more sustained period; which could "be absorbed by the cycle, with more volatility and some growth reduction"; and a third scenario involving the prolonged closure of the Strait of Hormuz, with crude oil at $110-120 per barrel. In any of these scenarios, Santander AM believes that the economic cycle is not at risk because "the starting point is very positive" and even better when compared to the energy crisis of 2022, following the war in Ukraine, which is the reference everyone is talking about these days.
How is Santander AM positioned? They favor sectors such as oil companies (especially producers linked to prices), materials, industry, defensive consumer goods, utilities (also defensive), or financials, closely tied to the economic cycle; in addition to seeking protection with liquidity and commodities like gold.
"Comparing this crisis with Ukraine is obvious, when the reference gas in Europe (TTF) reached 350 euros per MWh and remained sustainably above 100 euros (...) In reality, there has been no time to get nervous. Trump has already shown his cards, and neither China, nor the Gulf countries, nor Iran have any interest in the war not being resolved," assures Iturriaga. In fact, the manager believes that we are heading towards "a new world order with structurally cheap oil" after seeing the real weakness - compared to what was thought - of groups like Hezbollah or Hamas or the Iranian army.
"There are two concerns from a more macroeconomic perspective: a disruption in the energy chain and a potential short-circuit of business confidence, which is still ongoing," say from JP Morgan, one of the dozens of analysis firms already calculating the impact on the economy and prices of the possible continued closure of the Strait of Hormuz.
In the Eurozone, next Thursday the European Central Bank will decide whether to raise interest rates or not. It is not expected now, as it was not discounted in the pre-war era, 15 days ago; but its vice president, Luis de Guindos, acknowledged this week that the situation is very "complicated" to analyze and called on the markets not to "overreact", simply to avoid exacerbating a problem that could be resolved in hours if the White House decided. The market now contemplates a possible interest rate hike this year in the Eurozone on its new game board.
Taco on Iran will come too late for Trump, titled the bible of economic information, the Financial Times, in an article just a few days ago, hinting that Trump will end the conflict sooner rather than later, as the vast majority of managers and analysts believe. Trump is not interested electorally in prices continuing to rise, although, this time, says the FT, it will be too late; his retreat, that Trump always chickens out, will not prevent irreparable damage to confidence in the US. And what Trump does not count on is that the great rotation of portfolios seeking to reduce their weight in the US has been reactivated out of fear of a valuation adjustment of large tech companies and software firms. This is what is behind the exodus led by investors at Blue Owl or BlacRock, creating a sort of corralito by trying to mass exit private credit funds. Some say they are the canary in the mine of the next financial crisis.