The Top Stock Market Threat From the U.S.-Iran War, According to Bank of America

FomoAnxiety · 2026-03-05T16:06:00+00:00

The U.S.-Iran war has drastically reduced traffic at the Strait of Hormuz, causing oil prices to surge and potentially affecting the U.S. economy. However, the U.S. is better insulated from oil shocks as a net exporter, with analysts maintaining a stable economic outlook despite the conflict.

FomoAnxiety

2026-03-05 16:06:00

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The U.S.-Iran war has caused volume at the Strait of Hormuz to collapse by 95%, threatening the supply of oil across the globe. That creates issues for the U.S. economy and gross domestic product (GDP), according to Bank of America.

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The price for a barrel of crude oil (CL) has risen by over $10 over the past week. For every $10 increase, inflation could rise 0.1% and GDP could fall by a similar amount, said the firm.

U.S. Less Vulnerable to Oil Shocks as Rate Cut Odds Drop

On the bright side, the U.S. is more insulated from oil shocks than the past because it is now a net exporter of oil and gas.

“We believe U.S. macro risks are likely limited unless [there is a] pronounced oil spike,” wrote BofA analyst Meghan Swiber in a note to clients. Swiber added that the firm’s baseline outlook for the economy hasn’t changed.

Swiber expects the Fed to take on a more cautious approach to lowering interest rates in light of the war. That’s been reflected in rate cut odds on the CME FedWatch tool, which have fallen over the past week.

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