The JCI fell about –2.65% as global markets shifted into risk-off mode following U.S. and Israeli strikes on Iran, raising fears of wider conflict and disruptions to key oil routes like the Strait of Hormuz. This spike in geopolitical risk pushed investors out of equities — especially in emerging markets — while rising oil prices, inflation concerns, and a flight to safe-haven assets further weakened overall market sentiment.

In contrast, energy and commodity-related stocks outperformed sharply, with several gaining +15% to +25%. Investors rotated into resource plays as oil and broader commodity prices surged on fears of supply shocks. 
 

Heightened fears of supply disruption have lifted commodity prices as markets priced in a geopolitical risk premium. As seen in the chart, crude (CO1) volatility spikes during periods of tension, reflecting concerns over constrained exports, logistical bottlenecks, and tighter inventories. Even before actual shortages materialize, expectations of reduced supply drive restocking activity and speculative long positioning, pushing the broader commodity complex higher alongside gold (XAU).

Looking ahead, if the war de-escalates and supply risks fade, the geopolitical premium may unwind. However, a potential rate-cut cycle by the Federal Reserve could weaken the US dollar to support growth and exports. A softer dollar typically improves commodity affordability for non-US buyers and enhances the appeal of real assets as a hedge against currency depreciation, potentially triggering portfolio rotation back into commodities despite easing supply-side risks.
 

While the trajectory of the war remains uncertain and largely speculative, current price action suggests capital flows are still favoring the commodity complex. Despite the lack of clarity on whether supply disruptions will persist, investors continue to price in risk and maintain exposure to energy and gold-linked assets. As long as geopolitical uncertainty and supportive flows remain in place, commodity stocks may continue to offer relative outperformance in the near term.