Markets Plus Assessing the Market Impact of the Middle East Crisis
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Mar 5, 2026 Dan Phillips, CIO at BMO Wealth U.S., offers market and energy allocation perspective. Carol Schief, Chief Market Strategist, focuses on fundamentals, earnings, and geopolitics. Brent Joyce, Chief Investment Strategist, covers portfolio construction and diversification. They discuss market moves after the strike, Strait of Hormuz risks, resilience of global fundamentals, Canada’s energy exposure, and portfolio positioning amid heightened geopolitical risk.
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Diversification Held Up During The Shock
- Diversification worked: equity losses were modest and bonds still provided ballast despite recent yield moves.
- Brent Joyce notes year-to-date S&P 500 is roughly flat and US aggregate bonds still delivering over 1% through yesterday.
Strait Of Hormuz Fears Drove Regional Market Divergence
- The sharp midweek drop was driven by Strait of Hormuz fears and insurance pullbacks, lifting oil above $75.
- Dan Phillips highlights insurers withdrawing cover, spiking tanker costs and hitting Europe, Japan, and EM harder than North America.
Shock Hit From A Strong Economic Starting Point
- Markets entered the shock from a strong fundamentals position: earnings and GDP surprised to the upside.
- Carol Schief cites S&P 500 companies reporting ~10% top-line and ~15% bottom-line growth and resilient ISM and retail prints.