Geopolitical tensions between Israel, Iran, and the U.S. are currently driving volatility. The Israel ETF recently hit new highs, while Hong Kong and China‑A shares have pulled back on broader risk‑off sentiment. Analysts warn that any direct U.S. military involvement could spark a sharp stock sell‑off and lift oil prices toward $85–$100/barrel.

Oil and defense stocks are seeing rip‑roaring gains as investors position for further escalation. Oil surged 4%+ mid‑week, and defense giants like Lockheed Martin, Northrop Grumman, and RTX have rallied 2–3%. Still, some experts caution that U.S. shale output and diversification into renewables may cushion the damage.

Whether the trend continues depends on how the conflict evolves. If the U.S. escalates or Iran retaliates by blocking the Strait of Hormuz, expect another leg up in oil, defense, and safe‑haven assets like gold and Treasuries. If diplomacy prevails—out of this weekend or next week—markets may calm, and broader equities could recover. Personally, I’m watching developments closely before adding to either oil/defense or Israel-focused ETFs.