Iran war: Look beyond stocks to understand state of economy, experts say

What the report says

Al Jazeera reported on July 21, 2026, that economists are urging investors to look past relatively steady stock indexes to assess the economic impact of the escalating US-Israel war on Iran. The report said 10-year US Treasury yields have climbed nearly 60 basis points since the war began in late February, reaching 4.6 percent on Monday, a level Tufts Fletcher School professor Michael Klein described as the highest in the past year and an indicator that inflation expectations are rising.

A central concern is the Strait of Hormuz, which Al Jazeera said remains effectively shut after a brief increase in cargo flows following a US-Iran memorandum of understanding to extend a ceasefire. The strait had carried about 20 percent of global oil before the conflict. The report said June consumer prices fell 0.4 percent month to month, helped by lower energy costs, but Brent crude later rose to $91.42 a barrel on Sunday before easing to $88.04 on Monday. US petrol averaged $4 a gallon, up from $3.87 a week earlier.

Rachel Ziemba of the Center for a New American Security told Al Jazeera that the market had shifted from optimism about oil flows to a reassessment as the MoU appeared to weaken and conflict risks increased. She also pointed to shortages in refined products such as gasoline and diesel, compounded by reduced refinery output in the Middle East and Russia.

The report said major US equity indexes have shown mixed but limited movement, which Adelphi University economist Mariano Torras attributed partly to expectations that governments or central banks would intervene in a severe shock. Economists warned that prolonged energy disruption could raise fertiliser costs and worsen food inflation, especially in developing regions.