Global financial markets are poised on the edge of significant turmoil, should the United States initiate military action against Iran, according to a stark warning issued by Nigel Green, chief executive of deVere Group. Green’s statement highlights the mounting risks as geopolitical tensions in the Middle East escalate.
Despite weeks of rising instability between Israel and Iran, markets have remained relatively calm. However, Green asserts this stability is fragile and likely to unravel quickly if the US enters the fray directly.
“Markets have remained surprisingly steady in recent weeks,” Green noted, “but if the US joins the conflict militarily, that calm will break.”
He emphasised that current investor positioning reflects expectations of falling interest rates, subdued energy costs, and a broadly stable global economic environment. A US military intervention could force a swift and painful recalibration across financial markets.
Oil prices have already surged nearly 9% since Israel’s initial strikes on Iran, a reflection of growing concerns over potential supply disruptions. Should US action target critical infrastructure or transport routes, the increase in crude oil prices could accelerate further, exacerbating global inflationary pressures.
“The world economy is not in a strong position to absorb another energy shock,” Green warned. “If oil spikes from here, inflation expectations will shift, interest rate cut expectations will fade, and that would create a double blow for equities already priced for perfection.”
The US dollar has strengthened against traditional safe havens like the yen and Swiss franc in recent days, while US Treasury yields have dipped—indicators that investors are beginning to seek safety. Yet, according to deVere, these moves have been relatively muted and could escalate rapidly if the US takes direct military action.
“High-beta stocks, tech, emerging markets, and risk-sensitive currencies are likely to be the first casualties,” said Green. He added that the timing of any US military move—particularly if it occurs outside normal trading hours—could compound market disruptions, as investors scramble to reposition portfolios amid falling liquidity.
DeVere analysts highlight a significant disconnect between geopolitical developments and investor behaviour. Despite growing tensions and international diplomatic concerns, portfolios remain heavily weighted towards risk assets, with market volatility still at low levels.
“This is a dangerous disconnect,” Green stated. “If a broader war breaks out, there’s no reason to believe markets will process that information gradually. The initial reaction will be fast and disorderly.”
He stressed that such turmoil would not be limited to oil or defence sectors. “This kind of event drags on confidence and forces institutions to de-risk quickly,” he said. “It pulls down assets indiscriminately in the early stages.”
Green also urged investors to revisit their portfolios in light of potential geopolitical shocks, while avoiding rash decisions. “This is not a call to panic. But it is a call to prepare,” he said, advocating for robust risk management and forward-thinking asset strategies.
DeVere Group also flagged the potential policy implications. A sharp rise in oil prices could force central banks to reconsider expected interest rate cuts. Such a reversal would add further stress to equity and credit markets already vulnerable to a risk repricing.
Although no official shift in US military strategy has been confirmed, recent intelligence and defence reports indicate an increasing American presence in the Middle East. Markets are closely watching for any signals from Washington.
Green concluded, “The first move will be sentiment-driven. The second will be repricing across sectors. And the third will be the hunt for safe assets.”
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