Stock Market Alert: Iran & Oil Prices

Stocks were already having enough trouble dealing with resistance at 7,000. Then came an easy excuse to sell off given the emergence of the Iran conflict that has oil prices racing higher.

Let’s spend some time today talking about how this affects the current market picture and what that means for our investment strategy and portfolio. 

Market Commentary

The central topic today is the Iran conflict...and let’s hope it stays as a conflict and not an extended war like Iraq or Afghanistan. Gladly I believe that will be the case.

Here is the typical stock market pattern with most any military action.

Panic Sell > Big Bounce and continuation of bull market

The reason for the bounce is that that wars are never fought on US soil. So, it’s just business as usual for our economy plus a boost from extra government defense spending.

The wrinkle this time around is that Iran is a major oil producer and there are concerns about safe transport of oil in the region (like through the Strait of Hormuz).

As you can already see oil nearly doubled in price to a high of $115 per barrel before being talked down by the President on Monday that this should soon be over (as my Dad would say “from your lips to God’s ears”).

Oil is a main ingredient with inflation because it shows up in nearly the price of everything. So, an extended bout of energy inflation would exacerbate the already too high rate of inflation in the US which could slow down economic growth.

Plain and simple, the most important element for the stock market outlook is the health of the economy. Any increase in risk of recession and that is a negative for the stock market. That helps explain the initial sell off.

And now we see the 2nd stage taking place with an ample bounce. But since conflict not over, then every day will bring new headlines and a recalibration of what comes next for oil...inflation...recession risk etc. (Read: Volatility)

Add it all up and I don’t think this will take too long...and thus don’t believe that detrimental to oil prices or the economy. So, I would hold through any dip with assumption long term bull market trend still in place.

This also helps explain why there will be no panicked selling for Zen Investor just based on price action. Indeed smaller, growthier, riskier stocks will fall more than the average when times are tough.

Gladly, by the same token, they will bounce the most when the getting is good. And that is precisely why to hold through the dip.

Now I imagine many of you have the same next question: Hey Reity, should we buy energy stocks?

Given what I said above, the answer is no. Because this will likely be short lived and energy prices more likely to be lower 3 months from now than higher. If anything, it’s a chance to short energy...but that was more appealing Monday when oil was over $100 for a brief spell. 

All in all, I see no real change to our Zen Investor portfolio strategy because even after the initial nasty sell off, our portfolio is still up +10.89% on the year. That includes 2 hearty days of bounce back gains Monday and Tuesday of this week.

In other news employment is a shade too weak...inflation a touch too high...but that is the same song sheet for the past year. Even still the economy presses on with current Q1 estimates around 2% GDP growth. And thus no real cause for alarm.

The only thing worth adding is on the price action front we could have another bout of weak price action if things grow uglier with Iran. So the 200 day moving average could be in play for the first time in a looooooooonnnnnnngggggg time.

Right now, that stands at 6,592 and we got a stone’s throw away on Monday reaching a low of 6,636.

My point is that we typically test the 200 day moving average a couple times a year. And since it has been so long then wouldn’t surprise me if it came into play before the Iran situation is all said and done.

Breaking below would not be an immediate cause for panic UNLESS we truly seem to be in an extended conflict that will lead to long term higher energy prices and thus increase inflation and risk of recession. So, let’s keep a close eye on that possibility.

For now, best to assume bull market til proven otherwise. That philosophy has served us well through many other short term scares like the tariff situation back in March/April of 2025. And likely the same will apply here.  

What To Do Next?

Discover my Zen Investor portfolio that relies upon my 45 years of investing experience. 

During that time I have learned vital lessons from 7 bear markets…8 bull markets and just about everything else the “Mr. Market” can throw at us. 

I use this knowledge to create a detailed investment plan. Then lean into our proven Zen Ratings quant model to select the best stocks given their average annual return of +32.52%. 

In total the Zen Investor portfolio now has 20 top stocks that are hand picked for today’s unique market landscape. 

And as shared above it is doing very well in this rough and tumble year of 2026 as our portfolio is up +10.89% YTD even as the S&P 500 has been painted red.  

Plus 2 new stocks were added this week that both have stellar upside potential. 

If you are curious to learn more, and want to see my current top 20 stocks, then please click the link below to get started now. 

Discover the Zen Investor & Top 20 Stocks >

Wishing you a world of investment success!

Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)

Editor of the Zen Investor

Want to get in touch? Email us at news@wallstreetzen.com.