Iran War Pushes April Inflation to 3.8% as Ned Davis Flags New Stock Winners
Updated
Updated · Business Insider · May 23
Iran War Pushes April Inflation to 3.8% as Ned Davis Flags New Stock Winners
1 articles · Updated · Business Insider · May 23
Summary
April inflation accelerated to 3.8%—the fastest pace in about three years—prompting Ned Davis Research to say the Iran war and oil spike have ended the disinflation backdrop that supported stocks since late 2022.
Higher inflation paired with slower growth could shift market leadership toward value shares, with energy historically the strongest sector in rising-inflation periods, followed by consumer staples and health care.
Real estate, energy, materials and industrials have also posted the strongest earnings growth in hot-inflation regimes, with real estate averaging 34% EPS growth and energy and materials about 30%, NDR said.
Financials have been the weakest group by a wide margin in such periods, with an average relative loss of 11%, as higher-for-longer rates raise funding costs and pressure portfolios.
June could become a key test: with the Fed's last rate cut in December, a pause beyond six months has historically been followed by a broad-market pullback within four months, though equities later recovered on average.
With the Strait of Hormuz closed, which economies are poised to win and which face a decade of stagflation?
Can the Federal Reserve navigate this oil-fueled inflation without triggering a deep global recession?
As oil stocks surge, is this a profit opportunity or a final warning to abandon fossil fuel investments for good?
The 2026 Inflation Spike: Energy Shocks, Stagflation Risks, and Central Bank Responses Amid Geopolitical Turmoil
Overview
In April 2026, global inflation surged, driven mainly by persistent high energy prices linked to the Iran war and the closure of the Strait of Hormuz. This disruption severely impacted global energy markets, pushing up costs across sectors like air travel and clothing, even as some prices, such as new cars, fell. The resulting rise in living costs threatens to offset the strength in consumer spending, raising concerns about broader economic stability. The crisis highlights how geopolitical events can quickly ripple through markets, fueling inflation and creating uncertainty for both policymakers and investors.