3 Second Quarter Market Predictions

Closure of the Strait of Hormuz in Q1 2026 is driving up oil, natural gas and diesel prices and raising stagflation risks. Commodity price spikes combined with turmoil in private credit markets are increasing macroeconomic uncertainty and likely to widen credit spreads and pressure liquidity. Expect a risk-off reaction across energy-exposed sectors and fixed-income instruments as policymakers weigh inflationary pressures.

Analysis

Closure of the Strait of Hormuz in Q1 2026 is driving up oil, natural gas and diesel prices and raising stagflation risks. Commodity price spikes combined with turmoil in private credit markets are increasing macroeconomic uncertainty and likely to widen credit spreads and pressure liquidity. Expect a risk-off reaction across energy-exposed sectors and fixed-income instruments as policymakers weigh inflationary pressures.