Markets slide after Israel strikes Iran – Time for caution, not for selling

Global markets were jolted Friday after Israel launched a surprise strike on Iran, raising fears of wider conflict in the Middle East and sending oil prices sharply higher.

But global financial giant deVere Group says now is the time for investors to exercise discipline, and not to sell into fear.

The Dow Jones Industrial Average futures fell 1.2%, S&P 500 futures dropped 1.3%, and Nasdaq 100 futures lost 1.5% in early trade following reports of Israeli airstrikes near Tehran.

Brent crude surged over 8% as investors priced in potential disruption to oil flows from one of OPEC+’s top producers. Gold rose nearly 1% as demand for safe-haven assets spiked.

Nigel Green, CEO of deVere Group, says: “Markets are reacting sharply to a dangerous escalation between Israel and Iran.

“But while the geopolitical risk is real and rising, long-term investors should not be panicked into abandoning sound investment strategy. This is a time for caution, yes—but absolutely not a time for indiscriminate selling.”

The Israeli government described the move as a “pre-emptive strike,” citing concerns over Iran’s nuclear activity. Explosions were reported across the Iranian capital, with fears that Tehran will retaliate, increasing the chance of a wider regional conflict that could hit global energy markets.

“Investors are understandably rattled, and short-term volatility will likely persist,” notes Nigel Green.

“But time and again, we’ve seen markets overreact to geopolitical events—only to recover once the initial panic fades. This is not a systemic crisis, and fundamentals across most sectors remain intact.”

He added that oil-sensitive sectors and inflation expectations are the key areas to watch in the short term.

“With Brent crude now spiking above $90 per barrel, we’re seeing renewed concerns about inflation just as central banks were preparing to ease policy. If sustained, this could delay rate cuts or even force policymakers to reassess. But again, that’s not a reason to rush for the exit—it’s a reason to review and rebalance.”

According to deVere, these kinds of market dislocations are often where value emerges—especially for investors with a global, diversified, and disciplined strategy.

“Fear-driven selling typically leads to missed opportunities,” said Nigel Green. “Yes, reposition if you’re overexposed to vulnerable sectors. Yes, build resilience with commodities, gold, or defensive stocks.

“But don’t liquidate quality assets because of short-term headlines. Emotional decisions rarely end well.”

He concluded: “We are in a phase of repricing risk—not a market breakdown. Investors need to stay focused, stay diversified, and stay engaged. These are the moments that separate strategy from speculation.”

Michael Field, chief equity strategist at Morningstar, commented:

Allen Good, director of equity research at Morningstar, noted:

“We expect, absent a wider war, today’s rise in prices will likely prove to be a sell-the-news event. Oil markets remain amply supplied with OPEC set on increasing production and demand soft. US production growth has been slowing, but could rebound in the face of sustained higher prices. Meanwhile, a larger war is unlikely. The Trump administration has already stated it remains committed to talks with Iran. We expect a response from Iran, but it will likely be modest, like past retaliatory strikes, and not spark a wider war. Ultimately, fundamentals will dictate price, and they do not suggest much higher prices are necessary. Although the global risk premium could rise, keeping prices moderately higher than where they’ve been much of the year.”

Kenneth Lamont, Principal of Manager Research at Morningstar, noted that this could be “another blow to ESG”:

“A serious military escalation in the Middle East could deal another blow to ESG funds, which have already been battling against poor performance rising anti-ESG sentiment – particularly in the U.S. Traditional sectors often excluded from ESG portfolios, such as defence and fossil fuels, are likely to benefit, widening the performance gap. The recent EMSA ESG naming guidelines, which emphasise climate objectives for sustainable funds and have further curtained fossil fuel exposure, further cementing this divide.”