SYDNEY, March 4, 2026 – Goldman Sachs CEO David Solomon said financial markets may need several weeks to fully absorb the fallout from the Iran war, noting that investor reaction has so far been less severe than many would have anticipated given the scale of the conflict. Speaking Wednesday, David said markets often require time to process major geopolitical events, particularly when the economic consequences remain uncertain.

He said the initial response across asset classes has appeared relatively restrained even as tensions escalated in the Middle East. Oil prices have moved higher amid concerns about supply routes and regional stability, yet broader market adjustments have remained measured. That pattern suggests investors are reassessing risks gradually rather than making abrupt portfolio changes.

Cross-Asset Market Adjustments

David said investor reactions have varied across markets, with commodities responding more quickly than equities and credit. Crude oil, which is highly sensitive to geopolitical disruptions, climbed as traders weighed potential threats to supply flows and production output. Higher energy prices tend to influence inflation expectations and can affect transportation and industrial cost forecasts.

Stocks and credit instruments have shown fewer sharp swings, indicating that participants are responding with caution without shifting positions aggressively. David said markets often price the most directly exposed assets first, then incorporate broader effects on growth, earnings, and monetary conditions as more information becomes available. He added that this phased adjustment typically unfolds over days or weeks.

Link to Monetary Expectations

Bond markets have reflected a mix of safe haven demand and shifting rate expectations. Treasury yields have moved at times even as geopolitical risk increased, highlighting how investors are balancing inflation concerns tied to energy prices with assumptions about future central bank decisions.

David said market participants have not reached a consensus on how long adjustments may last or how deep they could become. He noted that investors tend to incorporate monetary expectations more fully once there is greater clarity on inflation and growth trends. Until then, market behavior can appear uneven as competing forces shape pricing.

Risk Assessment and Portfolio Review

David said financial institutions and asset managers are reviewing exposures carefully rather than making broad directional shifts. That process includes reassessing hedges, monitoring currency movements, and evaluating financing plans amid ongoing uncertainty.

He added that while some sectors have reacted more quickly, others have moved more gradually as investors weigh economic data, corporate results, and geopolitical developments. This measured adjustment may help explain why major indexes have not experienced extreme swings despite higher volatility in certain markets.

Market Outlook

As investors continue assessing the Iran war, markets are reflecting a combination of immediate reactions and slower recalibrations. Some sectors have attracted more defensive positioning, while others have held up as participants differentiate based on sensitivity to energy costs and global trade conditions.

David said markets may continue adjusting over the coming weeks as new information emerges. He reiterated that the full pricing process for an event of this scale can take time, particularly when the duration and broader implications of the conflict remain uncertain.

He said that while short term moves often draw attention, longer adjustments typically unfold gradually as investors refine expectations. In the interim, markets appear to be signaling caution without indicating widespread stress, suggesting that participants are balancing risk while awaiting clearer signals about economic consequences.