Fire and smoke rose into the sky after an Israeli attack on the Sakhan oil warehouse in Tehran, Iran on June 15, 2025.
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Market observers warned on Monday that global investors could underestimate the impact of the conflict between Israel and Iran because stocks rallied despite escalating war in the Middle East.
Two major regional countries Continue trading on MondayIsrael has fought for the fourth consecutive day since Air strikes were launched on Iran last week.
Even if the fight continues – Hundreds of people reported deaths – Global stock markets remained positive on Monday, seemingly shrugging, and were even more concerned about the conflict.
Russ Mold, investment director at AJ Bell, warned Monday that the risk market underestimates the “risk of a major fire in the Middle East”, especially in the energy market.
European Stocks Open higher Monday, with Asia Pacific Stocks and US stock futures Also traded in green. Even the Middle East Index made gains on Monday, with the Tel Aviv 35 gaining 1% last time after falling 1.5% last week.
“This is partly because there are a lot of activity and geopolitical considerations, partly because the potential outcome is so incredible,” Moore said. “In the worst case, oil and stock prices will be our least concern.”
In a note Monday morning, quantum strategist David Roche warned that the conflict between Israel and Iran “will be longer than the market-accustomed Israeli lightning strike.”
Torbjorn Soltvedtp, the leading Middle East analyst at Verisk Maplecroft, agreed, saying there is still a “huge concern” in the upgrade.
He told CNBC’s “Squawk Box Europe” that “what we have now is completely different, and what we see is actually a war and an open war.”
“Of course, this has a huge impact not only on the region, but on the energy market and how they explain what is happening.
As the Israel-Iran conflict attracted the attention of supply, the energy market played its best in the news of the attack.
Friday Significant to the greatest single-day gain Global benchmark Brent crude futures (last at $73.75 per barrel) remain well below prices since Russia’s full invasion of Ukraine in 2022 After the consequences of Moscow’s invasion of Ukrainian territory.
“The pause is the most likely outcome when Iran rejects Trump’s proposal from the United States,” Roche said. “The market may mistakenly assume that it is lasting peace. I will use this calm to buy energy assets as a safe haven.”
“Very modest” market reaction
However, some market observers have smaller opinions.
In a report on Monday, Deutsche Bank’s Jim Reid noted that despite both Iran and Israel, they have avoided the “most extreme escalation steps” so far.
“As geopolitical shocks become more frequent, it seems to happen at least once a year, we are referring to the work of stock strategists on the impact of this shock and how long it will take for the market to recover from them,” he said.
“The typical model is for S&P 500 “(Our strategists) believe that unless we escalate significantly, this event may be milder than that, as the rate of about -6% will be withdrawn by about 6% within 3 weeks of the shock, but then comes back.
Philippe Gijsels, chief strategy officer for BNP Paribas Fortis, told CNBC on Monday that he believes the market is right because it does not price huge upgrades, such as the United States being drawn to competition, or blocking the Hormuz Strait.
Hormuz StraitLocated between Iran and Oman, it is a crucial oil transport route that transports millions of barrels of oil every day.
“The market response is still modest despite this, so there is room for disappointment if things are to escalate,” Gijsels admitted on Monday.
