The war with Iran upended markets this month. There were losers – and winners
Markets Absorb Iran-Driven Energy Shock as Winners and Losers Diverge
Qwenews.com – September closed with a striking contrast across financial markets: bonds endured a punishing selloff, oil returned above $100 a barrel and central banks continued raising interest rates, yet major US stock indexes showed unusual restraint. The S&P 500 finished the month down only 0.45%, leaving it nearly unchanged despite the wider market stress.
The result has highlighted a growing divide. Investors have pushed bond yields to multi-year highs while shares, led by a small group of large technology companies, have remained comparatively steady. The question now is whether equities can continue to resist the effects of more expensive borrowing and elevated energy costs.
September also marked the end of the third quarter, making the month a useful point for assessing where the Iran-related energy disruption has caused the greatest damage—and where it has created opportunities.
Bonds Take the Hardest Hit
Fixed-income investors have faced one of the most difficult periods in the market. Bond prices generally move in the opposite direction of yields, so the sharp rise in yields has reduced the value of many existing bond holdings. Inflation worries, combined with tighter monetary policy, have intensified the pressure.
A Vanguard exchange-traded fund that follows the broad US bond market has lost 5% this year. Municipal debt has also weakened, with the iShares National Muni Bond ETF down about 6% over the same period.
Bonds are often viewed as the steadier part of an investment portfolio, particularly compared with stocks. But the combination of higher fuel prices, inflation risks and rate increases has challenged that perception. Volatility in bond markets also rose during the month, adding concern that sharp moves could create broader market disruptions.
There is, however, a potential benefit for investors entering the market now. Lower bond prices mean funds are cheaper than they were several months ago, while higher yields can provide more income for new buyers. That does not erase recent losses, but it changes the appeal of bonds for investors looking ahead rather than measuring past returns.
Travel Companies Feel Fuel and Rate Pressure
Higher oil prices have created an especially difficult environment for companies that depend heavily on fuel. Cruise operators and airlines have been among the clearest stock-market casualties, as investors weigh higher operating costs against consumer demand.
Norwegian Cruise Line Holdings shares, traded under the ticker NCLH, fell 31% during the third quarter and are down 34% for the year. It was the company’s weakest quarterly showing since the second quarter of 2022, following the start of Russia’s war in Ukraine.
Other cruise operators also ended the quarter lower. Royal Caribbean, or RCL, declined 16% in the quarter and was down almost 5% for the year. Carnival Corporation, listed as CCL, lost 14% during the quarter and stood 20% lower year to date.
Carnival offered a reminder that higher costs have not eliminated consumer appetite for travel. The company exceeded Wall Street earnings expectations on Tuesday, helped by strong demand that offset some of the impact from more expensive fuel. Analysts maintained that the broader outlook remained constructive because consumers have continued spending on cruises.
Airlines have faced a similar challenge. Rising jet fuel costs added to the pressure on American Airlines, whose shares dropped 26% in the third quarter and were down 13% for the year.
Precious Metals Lose Their Shine
Gold and other precious metals also struggled as yields and policy rates climbed. Gold futures lost more than 6% in September, while silver fell 9% and palladium dropped 12%.
These assets do not generate interest income, which can make them less competitive when bonds and cash-like investments begin offering higher returns. The month’s decline showed how quickly that tradeoff can affect metals prices when central banks are tightening monetary policy.
Big Technology Keeps the Index Steady
The S&P 500’s mild monthly decline concealed substantial weakness beneath the surface. Technology stocks rose 5% in September, while every other sector in the index finished the month lower. Because the index gives greater weight to companies with larger market values, the performance of the biggest technology businesses had an outsized effect.
Meta shares rose 29% in the third quarter, while Microsoft gained 38%. Their advances helped the S&P 500 increase 2% over the quarter, even as many companies outside the technology sector lagged.
An equal-weight version of the S&P 500, which assigns the same importance to every company, tells a different story. That index fell 1.55% during the quarter. The difference illustrates how dependent the headline market result has become on a relatively narrow set of large technology stocks.
For investors, that concentration matters. A flat or slightly lower benchmark index can make market conditions appear calmer than the experience of many individual sectors. Companies exposed to travel, energy costs and financing expenses have had a markedly different quarter from the largest technology firms.
Energy Producers Benefit From Higher Crude
While high oil prices create problems for fuel-consuming businesses, they can improve revenue and production incentives for energy companies. The energy sector has been one of the strongest areas of the S&P 500 this year, alongside technology.
Phillips 66 surged 51% during the third quarter and was up 98% for the year. Chevron climbed 23% in the quarter, ConocoPhillips advanced 20% and ExxonMobil gained 19%.
Those gains reflect the direct impact of a stronger crude market. Brent crude moving back above $100 per barrel has raised the potential value of production and refining activities, even as the same price increase has weighed on transportation businesses and consumers.
Bitcoin Delivers an Unexpected Rebound
One of the quarter’s more surprising advances came from bitcoin. The cryptocurrency rose more than 40% during the third quarter, recovering from an earlier slump and reaching as high as $86,500, its highest level since January.
The move came despite continuing headwinds across the wider cryptocurrency industry. In a quarter dominated by oil, bond yields and interest-rate concerns, bitcoin’s sharp rebound stood apart from the difficulties facing many traditional assets.
September’s market picture ultimately showed that the Iran energy shock did not affect all investments equally. Bonds, travel stocks and precious metals faced heavy pressure, while energy companies, major technology names and bitcoin produced notable gains. Whether that split persists may depend on the future path of oil prices, inflation and central-bank policy.
Related Reading
Frequently Asked Questions
What is The war with Iran upended markets?The war with Iran upended markets is the main topic of this guide. The article explains the context, practical details, and next steps readers should understand.
Why does The war with Iran upended markets matter?The war with Iran upended markets matters because readers are looking for a useful answer, not just a short summary. Good content should match search intent and help them decide what to do next.