Ashish Jain Says Energy Prices, Inflation and Interest Rates to Shape Global Markets in Next Phase of U.S.-Iran Conflict
Hindustan Bytes 
London-Based Fund Manager Says Investors May Need to Focus on Economic Consequences as Geopolitical Shock Evolves
London, United Kingdom – September 11, 2026: Six months into the direct military conflict involving the United States and Iran, global financial markets have shown greater resilience than initially anticipated, but the economic consequences of the conflict could become increasingly important for investors, according to London-based fund manager and financial markets strategist Ashish Jain.
Jain said the next phase of the conflict could be shaped less by the immediate geopolitical shock and more by its impact on energy prices, inflation, interest rates, corporate earnings and global trade.
“The first six months were about the shock of the conflict. The next six months will be about the economic consequences of that shock,” said Ashish Jain. “Markets have learned to live with geopolitical risk, but they cannot permanently ignore higher energy costs, inflation and the impact these factors have on interest rates, corporate margins and consumer spending.”
Energy Prices Remain a Key Market Variable
According to Jain, developments in the energy market will remain closely linked to the broader global economic outlook, particularly amid uncertainty surrounding energy shipments through the Gulf and the Strait of Hormuz.
A prolonged period of elevated crude prices could increase transportation and manufacturing costs, complicate the disinflation process and influence monetary-policy decisions by major central banks.
“Investors should not look at oil simply as a commodity trade. Oil is connected to almost every major macroeconomic variable — inflation, interest rates, currencies, government finances and ultimately equity valuations,” Jain said.
He added that a meaningful diplomatic breakthrough and improved security for energy shipping could reduce some of the geopolitical premium in crude prices. Conversely, further disruption to energy infrastructure or maritime traffic could lead to renewed volatility across energy and financial markets.
Interest Rates Could Become a Bigger Focus for Investors
Jain said the relationship between energy prices and inflation could make interest-rate expectations one of the most important factors for markets during the next six to twelve months.
“The bigger question is no longer whether geopolitical tensions will create volatility. They will. The more important question is whether the energy shock keeps inflation high enough to prevent central banks from reducing interest rates,” he said.
Jain believes expectations of a rapid return to the ultra-low interest-rate environment seen during the previous decade may need to be reassessed if inflation remains persistent.
“If rates remain structurally higher, investors will have to value businesses differently. Companies with excessive leverage and weak cash generation may struggle, while businesses with strong balance sheets, pricing power and sustainable cash flow should command a premium,” he said.
Equity Markets May Require Greater Selectivity
Despite geopolitical uncertainty, major global equity markets have remained relatively resilient during much of the conflict. Jain said continued investment in artificial intelligence, digital infrastructure, energy, defence and other strategic industries has supported parts of the market.
However, he cautioned that resilience in headline indices does not necessarily mean that risks have disappeared.
For the coming six to twelve months, Jain expects greater differentiation between sectors and individual companies. He highlighted artificial intelligence and technology infrastructure, energy security, power generation, defence technology, cybersecurity and selected financial companies as areas that could continue to attract global capital.
At the same time, highly leveraged businesses and companies particularly exposed to higher borrowing costs or weaker discretionary consumer spending could face greater pressure.
“This is not a market where investors should simply buy everything because the index is rising,” Jain said. “The next stage will reward quality, cash flow, strong management and sectors benefiting from structural investment.”
Gold Could Remain Relevant Amid Market Volatility
Jain said gold could continue to serve as a strategic asset amid geopolitical uncertainty, monetary concerns and long-term currency risks, although investors should not expect it to move in one direction.
“Gold remains an important hedge against geopolitical uncertainty, monetary instability and long-term currency risk, but it is not a one-directional trade,” Jain said. “When real yields rise sharply, even gold can experience significant corrections.”
He expects precious metals to remain sensitive to U.S. monetary policy, inflation expectations, bond yields and developments in the Middle East.
Three Potential Market Scenarios
Jain outlined three broad scenarios for the next six months: diplomatic de-escalation, a prolonged conflict without major escalation, and a significant regional escalation.
A credible diplomatic breakthrough could ease energy prices and inflation expectations, potentially supporting bonds and rate-sensitive assets. A prolonged conflict could keep energy prices elevated and contribute to continued volatility across equities, bonds and currencies. A major disruption to Gulf energy infrastructure or maritime traffic, meanwhile, could create another significant oil-price shock and trigger broader risk-off sentiment.
Impact Could Differ Across Economies
Jain said the economic effects would vary between regions. Energy-importing economies could face pressure through higher inflation, government finances, corporate margins and currencies.
For the UK, energy prices and inflation could influence interest-rate expectations, household spending and business confidence. In India, prolonged elevated crude prices could have implications for inflation, the rupee, government finances and corporate profitability.
Jain said investors should therefore focus on diversification, liquidity, risk management and avoiding excessive leverage rather than attempting to predict a single geopolitical outcome.
“Volatility itself is not the biggest risk. Being incorrectly positioned when volatility arrives is the bigger risk,” Jain said.
About Ashish Jain
Ashish Jain is a London-based fund manager, financial markets professional and entrepreneur with experience across global financial markets. His market commentary focuses on global equities, commodities, currencies, portfolio strategy and the impact of geopolitical and macroeconomic developments on international investors.
Disclaimer: The views expressed in this release represent market commentary and forward-looking opinions and should not be considered investment advice or a recommendation to buy or sell any financial instrument. Financial markets involve risk, and investors should obtain independent professional advice appropriate to their circumstances.
