What a week in global markets: Here's what you need to know

What happened? 

Following the recent attack in Iran, several key markets reacted sharply: 

- Oil prices rose around 20%. 

- Gas prices jumped 60%. 

- Most stock markets fell 2% - 5%, but South Korea’s main index plunged 11.5%. 

- US government bond yields moved higher (which means bond prices fell). 

- The Euro weakened against the US dollar. 

These types of market moves are common when major geopolitical events occur. They reflect uncertainty - not necessarily long-term economic damage.

Why does this matter?

The answer can be summed up in a single word: inflation - the rate at which everyday prices rise. 

Higher oil and gas prices can push inflation up because energy affects almost everything: transport, manufacturing, heating, and more. Inflation affects economic growth too, heaping more pressure on those already feeling it, which in turn reduces demand. 

The longer the Gulf conflict goes on, the more likely oil and gas prices will remain high or rise further - driving inflation higher. However, even if the situation in the Gulf calms down quickly, it could take weeks or months for oil production and shipping to return to normal. That means the inflation impact may stick around for a little while. 

You may hear concerns about “stagflation,” where inflation stays high while growth falls. Right now, we do not see that as the most likely outcome.

Why is the market so volatile? 

Events like this make markets more unpredictable. When uncertainty rises: 

- Banks and hedge funds reduce their trading risk. 

- That means fewer buyers and sellers in the market. 

- With lower liquidity, prices can move more sharply. 

The possibility of further retaliation in the region also adds to the unpredictability. This contributes to the short-term “noise” we’re experiencing.

What does this mean for your investments?

At Omnis, we work with third-party investment managers, and we serve as the company responsible for running, overseeing and ensuring the proper governance of the Omnis funds in your portfolio. This responsibility brings a host of benefits to investors in Omnis funds, especially in times of market volatility such as we have seen in recent weeks.

Firstly, we have full look-through to the underlying investments in our funds. On a day-by-day basis, we know exactly what exposure our clients have to affected sectors, countries and regions. We also have the power to act to protect our investors’ interests. At the extreme we can instruct our third-party managers to remove potentially risky exposures. At present, a balanced portfolio* of Omnis funds would have less than 0.3% invested in the Middle East. 

Secondly, we have access to the local investment expertise of our managers who are based across the globe. In times of market stress, we can communicate to you what is happening on the ground, and what our managers are doing to protect the value of investments and generate investment returns for the future. 

At a portfolio level, over the last few months, we had already begun reducing equity exposure, especially in the expensive broad US stock market (the S&P500), due to its concentration in technology and had diversified into areas like energy, pharmaceuticals and global bonds.

Looking ahead: 

- Global growth may slow as higher energy costs affect consumer spending. 

- This creates a headwind for equities (shares), which may not deliver the strong returns we saw in the last six months of 2025. 

- Bond markets should benefit eventually from slower growth and lower interest rates, although they may remain bumpy in the short term. 

Our positioning in the portfolios is already in line with these expectations, and we may look to make further changes as necessary. Importantly, the inflationary impact from higher oil and gas prices is expected to fade over time, not become a long-term problem. 

* Using Omnis Managed Portfolio Service - Balanced Portfolio as at 06.03.2026

So what should you do?

The short answer: stay invested, stay diversified, and stay calm. 

There will be noise, volatility and headline movements as the news flow continues, so it becomes important to focus on those three elements even more. A well-diversified portfolio is designed to mitigate exactly this kind of uncertainty. By adjusting the mix of assets, we aim to manage risk and support the long-term growth of your investments, helping you stay well-positioned for future market recoveries. 

Portfolios that simply track the market take the full impact of market swings. In contrast, our managed portfolios allow us to adapt to events like this and reduce risk where needed.

Final thoughts 

There will be more headlines, more market movements, and probably shorter-term volatility. But these events are part of investing, and your portfolio is built to navigate them. Our focus remains clear: 

✔ Actively manage your portfolios through different market conditions 

✔ Keep you positioned for long-term growth, in-line with your risk profile 

✔ Make adjustments to portfolios to capture opportunities and manage risk.