Investors dump global stocks as Middle East conflict triggers market shock

The escalating war in the Middle East has investors questioning some of 2026’s most popular trades and themes, with global equities slumping, the dollar jumping and traders scaling back their bets for rate cuts from the Federal Reserve.

“This year, investors have been positioning for growth. A stagflationary shock was not part of the plan,” said ING head of global markets Chris Turner.

“Investors ​are looking at things cautiously and would still have more to unwind.”

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