War in Iran Yields Unlikely Winners: Investors, Electric Vehicles
The Iran war's economic impact has been uneven six months in, with investors profiting while consumers face higher costs.
Stock markets initially plummeted following the US and Israel's February 28 attack on Iran, with the Dow entering a correction. However, a major turnaround occurred by late March, with the Dow gaining nearly 19%, the S&P 500 up almost 22%, and the Nasdaq surging 27%. The International Monetary Fund reported that the economy was 'being shaped by two major forces, pushing in opposite directions,' with war-strained growth offset by enthusiasm for artificial intelligence.
Main Street has seen rising fuel, food, and travel costs due to higher oil prices. Oil prices surged from around $72 a barrel before the war to nearly $120, although they have since eased to a 20% increase. Jet fuel is expected to cost 70% more on average than in 2025, leading airlines to hike ticket prices, baggage fees, and fuel surcharges while slashing flights.
The war has inadvertently boosted sales of electric vehicles (EVs), with year-over-year growth reaching 110% in Singapore, 180% in New Zealand, and 300% in Colombia. EVs are projected to account for 29% of total vehicle sales in 2026, up from 25% last year.
The conflict has also dealt a significant blow to farmers, with soaring fertilizer prices peaking at 44% higher than before the war in April. The United Nations World Food Programme warned that tens of millions could be pushed into hunger due to the 'suffocation of fertilizer exports.'