Energy In Focus as Global Equity Traders Brace For Iran Impact

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Oil tankers are also set to perform well, Thummel said. On the flip side, higher prices typically pressure the margins of refiners such as Marathon Petroleum Corp. and Valero Energy Corp.

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Defense

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Defense stocks have rallied over the past year as global tensions ratcheted higher, and the new conflict in the Middle East gives traders another reason to pile into the sector. Investors are likely to eye US prime contractors like Lockheed Martin Corp. and Northrop Grumman Corp., Europe’s Rheinmetall AG and BAE Systems Plc, South Korea’s Hanwha Systems and Taiwan’s Aerospace Industrial.

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“The market will take this as broadly positive for European defense stocks,” MWB Research analyst Jens-Peter Rieck said, though “any move is likely to be driven more by sentiment than by changes to earnings estimates.”

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President Donald Trump has already pushed European and Asian allies to spend more on their security, and he’s proposed an increase of some $500 billion in US military outlays. 

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The desire for more military funding may now spread to the Middle East, according to Jefferies analyst Sheila Kahyaoglu. US contractors would capture much of that new business from the region, which already accounts for a chunk of their foreign military sales, she said.

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Precious Metals

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Investors typically turn to safe-haven assets like gold and silver during times of geopolitical uncertainty, a move that drives miners’ stocks higher. Precious metal prices, especially gold and silver — already on a searing rally over the past year — started marching higher in the weeks before the Iran conflict. 

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Stocks to watch include Agnico Eagle Mines Ltd., Barrick Mining Corp., and Newmont Corp. in North America, Europe’s Fresnillo Plc and Hochschild Mining Plc., and Hong Kong’s Chifeng Jilong Gold Mining Co. The Canadian equity benchmark — S&P/TSX Composite Index — may outperform on Monday given its huge exposure to mining and energy sectors that make up about 38% of the gauge.

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Travel and Transportation

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Higher oil prices can raise airlines’ fuel costs and squeeze margins, just as the conflict also upends global travel. US airline stocks tumbled the most since April on Friday in anticipation of the conflict. Airlines across the Persian Gulf have extended their suspension of operations, a move that can disrupt the finely-tuned choreography of global aircraft movements.

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Investors will be watching stocks including US-listed American Airlines Group Inc. and Delta Air Lines Inc., Germany’s Deutsche Lufthansa AG, Singapore Airlines Ltd. and Australia’s Qantas Airways Ltd. 

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“The immediate impact will be on airline and travel stocks as we see news from closures of airspace over the Middle East, and also potentially cancellations of flights that needed to use the airspace en route to Europe,” said Francis Tan, chief Asia strategist at CA Indosuez Wealth Asset Management.

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Each 5% change in Jefferies’ estimate for the price of fuel in 2026 translates to a 5% to 10% impact on Delta’s and United Airlines Holdings Inc.’s earnings per share. For American, it represents a 35% impact in either direction, according to analyst Kahyaoglu. However, the North American carriers have “minimal” direct exposure to Middle East travel, she added, with Air Canada the highest at 1.1% of its capacity.

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Hotel operators could be hurt by travel disruptions and reduced demand. InterContinental Hotels Group Plc operates more than 100 hotels across the region, and its shares fell 3% in London on Friday.