How war is moving stock, commodity and prediction markets

On Feb. 28, the United States and Israeli militaries carried out a round of airstrikes on Iran, citing a need to take action against Iran’s nuclear weapons program and calling for regime change within the country. Iranian Supreme Leader Ali Khamenei was killed in the attacks.

Iran has retaliated with missile and drone attacks on Israel, U.S. bases in the Middle East, and several U.S.-aligned Arab states, including the United Arab Emirates, Kuwait, Bahrain and Oman. Both sides of the conflict have struck targets within Iraq.

All of the countries mentioned have reported deaths in the recent exchange of strikes (including the U.S., which lost several soldiers stationed in the Middle East), raising fears that this may only be the beginning of a protracted regional war.The Middle East is home to hundreds of millions of people and a large share of the world’s energy resources, which is why the clashes are already affecting financial markets worldwide, and could have a broad economic impact in the weeks ahead. Here’s what to know.

At the time of writing, five out of the twelve member states of the Organization of the Petroleum Exporting Countries (OPEC) have been attacked in the recent hostilities, highlighting how the violence could imperil the global supply of oil.

Brent crude oil futures — the main benchmark for the global market price of a barrel of oil — opened Sunday night about 8.5% higher than their closing price last week, and have climbed further since then. The price of a barrel has approached $85 this week, after trading at or below the $70 line for much of last week. Natural gas futures have seen similar gains.As we will discuss below, this disruption to the global energy industry could have significant implications for the stock market. It is also already raising gas prices. But its most immediate impact has been on commodity traders, who didn’t have to wait until Monday morning to see the impact of this weekend’s news on their positions.

One non-energy commodity which has also been affected by the recent geopolitical turmoil is gold, as gold bullion is often perceived as a safe store of value in times of crisis. The price of an ounce of gold surged to an all-time high above $5,400 early Monday morning, before retreating back to the low $5,000s range.

The S&P 500 index as a whole has traded mostly flat this week, as some of its biggest components (e.g., Big Tech) have little exposure to events in the Middle East — but some specific sectors of the market were hit by news-related volatility.

Stocks in certain industries, such as oil companies and defense contractors, are up this week. Higher global oil prices mean higher margins for the oil & gas industry, and the prospect of a major war could increase government demand for defense contractors.

For example, shares of Palantir Technologies (PLTR), a contractor that provides software and AI services to the U.S. military, are up more than 10% over the last 5 trading days at the time of last update, due to speculation that its tools are being used in the ongoing Iran strikes. And Chevron Corp. (CVX), the second-largest U.S.-listed oil company by market cap, has risen 1.5% over the same time period.

Other portions of the stock market reacted negatively to this weekend’s news — in particular, travel stocks.

United Airlines (UAL), the second-most-valuable U.S.-listed airline, has seen shares fall more than 17% over the last five trading days, with other airlines posting similar returns. The prospect of higher fuel costs, as well as travel restrictions across the Eastern Mediterranean region, have bearish implications for airlines. Some cruise line operators were also affected: Carnival Cruise Lines (CCL), the second-most-valuable in the U.S., saw shares sink more than 13%.

The U.S.-Israel-Iran conflict of recent years has been a subject of significant activity on prediction markets, which allow traders to bet on myriad “yes-or-no” questions, sometimes including geopolitical questions about the Middle East.

Prediction markets have distinguished themselves as an often-astute barometer on political questions. For example, they accurately favored Donald Trump in the weeks leading up to the 2024 U.S. presidential election, when most polls gave him a 50-50 chance of winning.

But their accuracy has also fueled suspicions of insider trading. Last month, Israeli authorities accused two people of using classified information to place bets on Polymarket, the world’s largest prediction market. Israeli broadcaster Kan News previously reported on government investigations into Polymarket bets related to the last round of U.S.-Israeli strikes on Iran in 2025.

And last weekend, six new accounts were opened and funded on Polymarket, and placed large “yes” bets on the question “U.S. strikes Iran by February 28, 2026?” The accounts netted more than $1.2 million in profits after the strikes began.

That question has now closed, but the most prominently-displayed question on the Polymarket homepage is still related to the conflict: “U.S. forces enter Iran by December 31?” Bettors give it a 56% chance at the time of last update.

Day traders, futures traders and prediction market bettors may have no choice but to react to last weekend’s news, and its effect on markets, due to the short-term nature of those strategies.

But for investors with long time horizons, such as those building a retirement nest-egg, trading the recent volatility is unlikely to pay off. A 2020 study published in the Journal of Finance examined the top stocks purchased on Robinhood between May 2018 and August 2020, and found that their average 20-day return was -4.7%, suggesting that most short-term traders on that platform lost money in that period.

Investing experts tend to recommend staying the course instead, and making consistent contributions to buy-and-hold investments like index funds throughout periods of volatility.

If you’re looking to invest for the long-term — but you think you might be prone to flinch at news events like those of the last weekend — taking yourself out of the equation by getting a robo-advisor or an online financial advisor to manage your portfolio may be worth considering, too.

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In periods of volatility like this, some traders bet against certain stocks via short-selling — a maneuver where they borrow shares, sell them, and then try to buy them back at a lower price later and pocket the difference. But who lends them the shares in that situation?

Well, you do — if you participate in your broker’s stock lending program. Here’s what to know about these programs, and which brokers offer them.

Stock lending, also known as fully-paid securities lending, is an opt-in program that lets you earn interest by lending investments you own to your broker, who in turn lends them out to short-sellers.

Most brokers offer it on an everything-or-nothing basis, meaning that you can’t choose which stocks you’re willing to lend — you can only turn stock lending on or off for your entire account. That said, your broker might not lend out your stocks if there isn’t enough demand for them.

If you opt into stock lending, you still have control over the shares or other assets you’ve lent out, and can sell them at any time. What you don’t have control over are changes to your voting rights, how your investment income is taxed, and the amount of protection you have in the event of broker insolvency. (More on that below.)

Most of the brokers reviewed by NerdWallet offer a stock lending program, though they sometimes are subject to eligibility restrictions such as a $5,000 minimum balance. Here are all the brokers we review that offer a stock lending program:

I recently got interested in stock lending after Robinhood prompted me to turn it on, plying me with the promise of extra returns. I ultimately did so — but not until I had dug through the terms and conditions and risks of the practice. Here’s what I learned.

Depending on which broker you use, stock lending may not be available to you if you have a small balance, and even if you qualify, there are some caveats to consider before turning it on:

» Best online brokers for stock trading

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Below is a table of blue-chip stocks that are reporting earnings in March, with the expected dates and average analyst estimates for their upcoming earnings reports.

We’ve filtered the list for companies with a market capitalization of at least $100 billion. These are high-volume stocks of which earnings reports are often major trading events for options traders and day traders.

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Neither the author nor editor owned positions in the aforementioned investments at the time of publication.

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