1 September, 2026

Iran conflict and diversification: protecting portfolios amid resilient growth and higher yields

Summary

Highlights

In the six months since the start of the Iran war, global growth has remained resilient, while inflation has stayed above target.
Equities rose on earnings and AI optimism, while bonds suffered on fears of fiscal slippage and higher supply.
A European diversified portfolio delivered strong returns, offsetting bond weakness and benefiting from the equity rally.

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In this edition

Six months after the conflict in the Middle East began, the macroeconomic backdrop has proved more resilient than expected, particularly in the Eurozone where we are seeing stronger Q2 data and improving leading indicators. Inflation is expected to peak at lower levels, but remain above target in major economies with geopolitical tensions and climate patterns still posing risks to energy and food prices. Meanwhile, earnings growth has remained solid, broadening beyond technology and across countries, while yields have risen, amid fiscal and supply concerns, as well as shifting monetary policy expectations.

Looking ahead, a diversified approach across regions and asset classes could help navigating a period in which the credibility of policymakers and the fundamentals of companies, particularly in the artificial intelligence ecosystem, will come under increasing scrutiny.

Key dates

1 Sep

Brazil GDP, Eurozone Manufacturing PMI and CPI, US ISM Manufacturing

3 Sep

Eurozone Services and Composite PMI, Eurozone PPI , US ISM Services

4 Sep

Eurozone retail sales, US Nonfarm payrolls and unemployment rate

Read the full article on the Amundi Research center

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