The Iran war and the AI boom are driving a wild ride in global markets
Written by Marc Jones
LONDON, June 30 (Reuters) – Investors have had to take a dose of motion sickness pills this year as turmoil from the Iran war comes amid seemingly unstoppable growth in all things AI and more.
Global stocks are now $7 billion higher than at the end of 2025, although the war caused a $9 billion drop in March, when oil shot to $120 a barrel and hopes of lower interest rates faded.
South Korea’s stock market is up 100% and Elon Musk’s $2 trillion SpaceX has exploded, but the tech giants “Magnificent Seven” are down as a set and gold has suddenly lost its luster.
Equity Bank’s chief economic adviser, Charlie Robertson, said it was surprising, not because of what happened, but because of what didn’t happen.
“We’ve had the biggest political shock we’ve ever imagined and it hasn’t devastated global markets,” he said.
The MSCI All-Country World index jumped nearly 10%, or about $7 billion in market capitalization, in the first half of the year. It also registered the second best quarter since 2020, though it paled in comparison to South Korea’s record.
Financial markets, meanwhile, have been gripped by the woes of the Japanese yen, which is at a 40-year low despite Tokyo spending 11.7 billion yen ($72.25 billion) to prop it up.
The Nikkei is up nearly 40%, but State Street’s head of global macro, Michael Metcalfe, said the fate of the yen is now a key global risk point.
“It’s all about what happens to the demand for Japanese fixed income if you have a problem with the yen,” he said, explaining the risk that higher Japanese interest rates would send money back to Japan and trigger a sell-off elsewhere.
The dollar’s broad 3% rise suggests recent talk of its demise was premature, Metcalfe said, although BofA analysts say it’s still “rent, not own” for now.
A POWERFUL RIDE FROM DAY ONE
This year has been a wild ride, with the United States’ capture of Venezuela’s president and Donald Trump’s demands for control of Greenland while issuing threats of tariffs on all and sundry.
January brought the largest monthly increase in gold prices since the latter stages of the global financial crisis, but they have recently reversed.
Gold fell more than 12% in June, its worst monthly run since October 2008 and the biggest quarterly decline since 2013. To be honest, it has doubled in value since the beginning of last year.
Venezuela’s bonds, which Caracas has not paid for in nine years, have risen 55% since the US impeached President Nicolas Maduro, making them the world’s best performers.
