Markets, Oil, and Bonds: What Investors Should Watch Right Now

While headlines can spark quick selloffs, prior conflicts show declines may be short-lived if the economy avoids recession, and markets often absorb geopolitical shocks faster than expected.

Last Edited by: LPL Research

Last Updated: March 13, 2026

illustration, vertical candlesticks chart viewed through a magnifying glass

IN THIS ARTICLE:

Global tensions have raised market anxiety, with stocks, oil, and bonds all reacting in different ways. History suggests markets often absorb geopolitical shocks faster than expected, but the path can be bumpy. Short‑term swings are common, and emotions can run high.

What Is Driving Stocks?

LPL Research notes that while breaking news can trigger sudden selloffs, history shows that stocks often recover when conflicts do not lead to an economic downturn. Recent commentary encourages patience, diversification, and resisting the urge to react to every new headline.

One area worth watching closely is energy supply. Much of the world’s oil moves through the Strait of Hormuz, a narrow route in the Middle East. If shipping remains uninterrupted, market effects may fade. If shipping slows or stops for an extended period, the impact could be more meaningful.

Another important trend this year is that stock market strength has spread beyond a small group of very large companies. Many stocks have performed better than the overall market index, even as volatility has increased. This broader participation can help soften market swings, even though outcomes can always change.

Investors should also note that in LPL’s latest Market Signals Podcast, traditional safe assets did not all behave as usual. At times, stocks, bonds, and gold fell together, while the U.S. dollar gained strength. Some investors have also turned their attention to areas like food commodities and agricultural inputs, looking for assets tied to supply concerns. These mixed signals reflect ongoing uncertainty about inflation and economic growth.

Why Oil Prices and Bond Markets Matter

Energy markets sit at the center of today’s risks. Concerns linked to Iran have pushed oil and natural gas prices higher. If higher energy costs persist, they can raise everyday prices and slow economic activity. That is why investors should track whether shipping routes through the Strait of Hormuz return to normal or remain strained in the coming weeks.

Simultaneously, bond markets are responding to competing forces. Earlier this year, investors focused on how artificial intelligence (AI) could disrupt industries and possibly slow growth. As the Iran conflict escalated, that concern helped push bond interest rates lower. More recently, rising oil prices have brought inflation worries back to the forefront, pushing interest rates higher again.

LPL Research notes that bond behavior can differ from expectations during fast‑moving events. When inflation fears increase, bonds may not always provide their usual stability. Tracking inflation expectations and oil prices can offer clearer insight than reacting to each news update.

How to Navigate the Noise

A few practical steps based on LPL Research’s latest views:

  • Keep investments balanced across stocks, bonds, and cash instead of reacting to each headline
  • Track oil prices and shipping activity for signs about inflation and volatility
  • Expect unexpected behavior from traditional safe areas during unsettled periods
  • Use market pullbacks to consider opportunities that align with long‑term goals rather than timing every move

LPL’s Research team remains patient on equities and selective within sectors, while monitoring energy and credit conditions closely.

 

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Navigating Dividends and Geopolitics in Today's Market — March 6, 2026

 

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KEY MARKET INDICATORS FAQS

Geopolitical shocks do not always result in bear markets. Historically, many market pullbacks driven by geopolitical events have been temporary, especially when they did not coincide with an economic recession. Markets tend to recover once uncertainty fades and the economic outlook stabilizes. That said, every event is unique, and the market impact depends on factors such as duration, escalation, and whether the shock spills over into broader economic activity.

Safe-haven assets can sell off when inflation concerns rise alongside geopolitical stress. For example, higher oil prices can raise inflation expectations, which may pressure both stocks and bonds at the same time. In these environments, investors often prioritize liquidity, which can lead to a stronger U.S. dollar even as other traditional defensive assets struggle. This type of market behavior reflects inflation concerns rather than a loss of confidence in safe havens themselves.

One of the cleanest indicators to monitor is the trajectory of oil prices, along with developments affecting global energy supply routes—particularly shipping through the Strait of Hormuz. Disruptions or risks in this region can quickly influence oil prices, which in turn affect inflation expectations, interest rates, and overall market volatility. Sustained moves in energy prices tend to matter more for markets than short-lived headlines.

Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. ​

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. ​

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. ​

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. ​

All investing involves risk, including possible loss of principal. ​

US Treasuries may be considered “safe haven” investments but do carry some degree of risk including interest rate, credit, and market risk. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. ​

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio. ​

Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. Earnings per share is generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio. ​

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.​

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Indexes are unmanaged and cannot be invested in directly.

The MSCI US Broad Market Index captures broad U.S. equity coverage. The index includes 3,204 constituents across large, mid, small and micro capitalizations, about 99% of the U.S. equity universe. Indexes are unmanaged and cannot be invested in directly.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. Private credit carries certain risks — illiquidity, opacity, borrower concentration, and bespoke structures — that distinguish it from corporate bonds and bank loans and complicate its evaluation and oversight.

All index data from FactSet or Bloomberg.

This research material has been prepared by LPL Financial LLC.

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