MW Why peak uncertainty about the Iran war signals a stock-market rally may be near
By Jamie Chisholm
History shows markets tend to bottom about three weeks into a crisis
Where the war goes from here is not known. But the market is giving off vibes of peak uncertainty, says a research firm.
Markets continue to be whipsawed by fallout from the war with Iran. Stocks have hit a fresh low for the year, while the inflation concerns caused by spiking energy prices means supposed havens like Treasurys have been tumbling too, sending yields sharply higher.
Not even gold has provided sanctuary, with bullion on Thursday dropping to its cheapest since the early-February precious metal implosion.
But independent investment research provider Variant Perception alludes to a looming shift in market psyche as they reckon "the next couple of days will mark 'peak uncertainty' about the Iran war."
In a research note sent late Thursday, the firm agrees that action in some parts of the market has become disorderly of late, a sign that some traders are being forced to exit positions.
"A very simple rule of thumb for tactical liquidation is when gold and equities crash together, which usually signals margin call / liquidation-esque behavior," they say. "We are in the zone where tactical liquidations are occurring."
The firm adds that investors are also being rattled by sharply higher short-term interest rates, as the market switches from betting on a number of rate cuts this year to pricing in the possibility of a hike. The Cboe Volatility Index VIX in recent days trading above VIX futures also speaks to the intensity of the current de-risking, they say.
Source: Variant Perception Research
All this has coincided with the Iran war spreading and intensifying as the bombing of Middle East oil and gas facilities this week - with Qatar shutting down much of its gas production - means the worst case scenarios have started to be realized.
"The significant damage to critical energy infrastructure alongside the collapse in ship volume through the Strait of Hormuz were both unthinkable 3 weeks ago. Both are now realities," the firm says. The news "seems plausible as the event that marks peak uncertainty for markets over the next couple of days."
Now that China, which gets 30% of its liquid natural gas from Qatar, is impacted, the country will be more likely to work with the U.S. to find a resolution. Back when markets were spooked by President Donald Trump's "Liberation Day" tariffs, an announcement that he had spoken with Chinese President Xi Jinping on April 25 helped quell turmoil. A comment that China will work with the U.S. could be a similar catalyst.
A bit of history from Jim Reid, strategist at Deutsche Bank, provides another reason why the crisis-induced sell-off may be coming to an end.
Reid's chart, published Thursday, shows an average of how the S&P 500 has performed after 30 major geopolitical events.
"In date terms, the average worst point [for the S&P 500] tends to come around three weeks after the initial shock, and we are now closing in on that window," says Reid. "Looking further out, median returns are back to pre-shock levels by day 34, which is just under seven weeks after the event, while average returns are also close to full recovery by then."
The markets
U.S. stock-index futures (ES00) (YM00) (NQ00) are lower as benchmark Treasury yields BX:TMUBMUSD10Y rise. The dollar index DXY is up, while oil prices (CL.1) climb off session lows and gold futures (GC00) are trading around $4.670 an ounce.
Key asset performance Last 5d 1m YTD 1y S&P 500 6606.49 -0.99% -3.72% -3.49% 16.66% Nasdaq Composite 22,090.69 -0.99% -2.61% -4.95% 24.87% 10-year Treasury 4.302 2.00 21.10 13.00 4.40 Gold 4670.7 -7.02% -8.95% 7.81% 54.24% Oil 95.52 -3.81% 44.03% 66.38% 39.85% Data: MarketWatch. Treasury yields change expressed in basis points
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The buzz
Axios reported the U.S. is considering a possible seizure of Kharg Island to force Iran to reopen the Strait of Hormuz.
Friday delivers a 'triple witching' event, with the quarterly expiration of stock options, stock index futures, and stock index options.
FedEx shares $(FDX)$ are jumping after the shipping company delivered earnings and forecast higher sales and profits this year.
Shares of Super Micro Computer $(SMCI)$ are sliding after the U.S. government said the company's co-founder engaged in a backdoor scheme to divert Nvidia (NVDA) chips to China.
Unilever $(UL)$ said it is in talks to sell its foods business to McCormick $(MKC)$, following a report in the Wall Street Journal.
OpenAI is planning to unify its ChatGPT app, coding platform Codex and browser into a desktop "superapp," according to the Wall Street Journal.
Fed officials making comments include vice chair for supervision Michelle Bowman appearing on Fox Business at 8:00 a.m. Eastern, and Gov. Christopher Waller appearing on CNBC at 8:30 a.m.
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The chart
The S&P 500 delivered a worrying technical signal when it closed on Thursday at its lowest since Nov. 21, having lost 5.3% from its record high, and finished below its long-term trend. Indeed, as the chart posted by freelance journalist Mike Zaccardi shows, its the first time in 214 days that the Wall Street stock benchmark has closed below its 200-day moving average.
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March 20, 2026 07:05 ET (11:05 GMT)
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