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- Newmont Corporation (NEM.us): Benefiting from the flight to safety. The EMAs are aligned in a bullish formation, while the RSI remains above 50, pointing to positive underlying momentum.
- Lockheed Martin (LMT.us): Gapped higher amid escalating Middle East tensions. EMAs remain in bullish alignment and the RSI is holding above 50, reinforcing the constructive momentum backdrop.
- BP (BP.uk): Moved sharply higher as oil prices reacted to transport disruptions through the Strait of Hormuz. EMAs are bullish and the RSI continues to signal underlying strength in the shares.

Quick Market Overview

So far, US equities have showed little reaction to escalating Middle East tensions and reports of Iran's leader's death, with the S&P 500 and Nasdaq edging higher while the Dow dipped slightly.

Investors treated the episode as a geopolitical shock rather than an economic inflection point, even as oil briefly jumped 13% and gold moved above $5,300 on Strait of Hormuz concerns.

Limited sector rotation suggests underlying economic resilience is containing broader market anxiety.

The Iran Conflict

The United States and Israel launched a coordinated military offensive against Iran on Saturday, involving extensive airstrikes on military, command and nuclear-linked targets as part of what both governments described as pre-emptive action against perceived threats from Tehran's programmes. Iran has since responded with attacks on U.S. and allied military assets in the region, and the conflict shows no sign of abating.

The operation has been largely air-based so far, with large formations of aircraft and missiles employed by both sides, and is expected to unfold over weeks rather than immediately turning into a large-scale ground invasion. That said, retaliation has already expanded beyond Iran's borders, affecting wider Middle East targets.

War shock: classic market reflex
In the short term, conflict tends to trigger a familiar pattern: oil rises on supply risk, gold climbs on safe-haven demand, and equities slip as uncertainty widens risk premia. It's the market's standard reflex to geopolitical escalation.

Oil spikes on transport risk, not production shortfall
FXCM's UKOIL CFD, its Brent proxy, is trading above $80, while USOIL, its WTI proxy, sits above $73 as disruption in the Strait of Hormuz, a route for roughly 20% of global oil flows, slows tanker traffic. The issue is transport, not production. Even with OPEC+ planning a modest April increase, a prolonged blockage could push Brent toward $100 and reignite inflation concerns. For prices to stabilise, passage through the Strait likely needs to normalise quickly.

Gold stocks poised to benefit from risk surge
Heightened geopolitical uncertainty is reinforcing demand for havens, lifting gold above $5,400 an ounce as US–Israel strikes on Iran deepen tensions. With Tehran ruling out negotiations and fears of disruption through the Strait of Hormuz persisting, markets remain on edge. Oil and the US dollar have also firmed, but sustained uncertainty is likely to provide a tailwind for gold equities as investors seek defensive exposure.

General Equity Market Health (SPX500)

The SPX500 initially sold off but finished off its lows and marginally higher, with technical support near 6,750 proving resilient. Notably, the Invesco S&P 500 Equal Weight ETF remains in a firm year-to-date uptrend, signalling ongoing rotation beneath the surface. So far, geopolitical tensions have not inflicted material damage on equities. Aerospace and defence, within Industrials, is emerging as a clear beneficiary of both sector rotation and Middle East uncertainty and is up over 16% year-to-date.

Potential conflict diversifiers
With oil transport risks elevated, gold reclaiming haven status and aerospace & defence outperforming, selective diversification may help cushion portfolios. Three names in focus are Newmont (NEM.us) for gold exposure, Lockheed Martin (LMT.us) for defence leverage, and BP (BP.uk) for energy exposure.

Potential Trade Setups

Newmont Corporation (NEM.us)

Technical Analysis
- NEM's EMAs are in a clear bullish formation, with strong slope and healthy separation.
- The RSI is holding above 50, indicating positive underlying momentum.
- If the RSI continues to remain above 50, price should stay supported, increasing the likelihood of a move above the prior high at 134.99.

Caveat
- If the RSI stalls and falls below 50 on a sustained basis, underlying momentum would begin to weaken.
- That would represent a negative development and could limit further upside.

Fundamental Perspective
Newmont positioned for geopolitical bid in gold
Heightened Middle East tensions have pushed gold up, close to $5,300, reinforcing its role as a safe haven. As the world's largest gold miner, Newmont stands to benefit from higher bullion prices through stronger revenue and cash flow, and analyst consensus remains broadly constructive.

That said, miners do not move in lockstep with gold. Production trends, cost control and operational execution matter, and gold equities can lag the metal in the short term. Still, in a sustained risk-off environment, Newmont offers leveraged exposure to elevated gold prices.

Lockheed Martin Corporation (LMT.us)

Technical Analysis
- LMT gapped higher at the start of the week following the outbreak of the Iran conflict.
- If this proves to be a continuation gap, it would signal the potential for further upside.
- A breakaway gap was also recorded on 29 January (short blue arrow), reinforcing the bullish structure.
- The EMAs have been in a bullish formation since December, reflecting a sustained upward impulse.
- This is supported by an RSI that remains above 50, confirming positive underlying momentum.
- LMT has had a strong start to the year and is up 40% year to date.

Caveat
- If the gap is filled and the RSI begins to drift back towards 50, it would suggest a slowdown in momentum.
- A sustained move below 50 on the RSI would indicate that the bullish underlying momentum has faded.

Fundamental Perspective
Lockheed rallies on geopolitical premium
Lockheed Martin shares have risen amid the escalating Middle East tensions, reflecting renewed investor appetite for defence exposure. Contractors often attract flows during geopolitical stress, as governments accelerate procurement and long-term contracts provide revenue visibility. Lockheed's sizeable backlog, including F-35 jets and advanced missile systems, supports demand expectations while global defence budgets remain elevated.

Short-term gains can be headline-driven, but the sector's sensitivity to conflict makes LMT a natural beneficiary of rising security risk. Longer-term performance, however, still hinges on contract execution and broader market conditions.

BP (BP.uk)

Technical Analysis
- BP is up more than 13% year to date.
- The EMAs have largely remained in a bullish formation, confirming the prevailing uptrend.
- The RSI has held above 50, indicating supportive underlying momentum.
- As long as these conditions persist, the path of least resistance remains to the upside.

Caveat
- Yesterday's candle printed a long upper shadow, suggesting that buying strength faded into the close.
- Price must clear the shadow's high at 508.60 to sustain further upside.
- If this level proves to be firm resistance and the RSI begins to decline, it would represent a negative development for near-term momentum.

Fundamental Perspective
BP gains on oil's geopolitical spike
The escalating Middle East tensions have pushed Brent sharply higher, at one point up around 13%, on fears of disruption through the Strait of Hormuz, a key oil transit route. The move has lifted major energy names, with BP up roughly 2–2.5% in London as crude rallied.

Higher oil prices typically boost upstream earnings and sentiment across the sector, giving integrated majors like BP leveraged exposure to geopolitical risk. That said, conflict-driven spikes can fade quickly if tensions ease and traffic through the Strait of Hormuz increases, and longer-term performance will still depend on broader economic conditions and oil's underlying supply-demand balance.

Hot News, Cold Logic

Markets face a clear fork in the road. A ground invasion or wider regional escalation would risk a prolonged conflict, tighter oil supply, firmer inflation and greater recession odds, likely driving crude sustainably higher and pressuring equities. By contrast, swift containment would see the risk premium fade and volatility ease, while a longer-term shift that restores traffic through the Strait of Hormuz would boost supply, cool prices and provide a supportive backdrop for stocks.

Final Thought

Global markets are tending towards risk-off turn as escalating Middle East tensions over the Iran conflict have sparked sharp sell-offs in equities, surging oil prices and haven bids in bonds and the dollar, but if geopolitical risks de-escalate, this pressure could prove a temporary repricing that reopens opportunities for selective, long-term investors.