In the first quarter, there seemed to be one thing after another to create further uncertainty for markets.
- The artificial intelligence (AI)-related selloff that began late last year spilled into early 2026, as investors worried about spending on AI and the businesses it could disrupt.
- We also saw a(nother) partial government shutdown, impacting the U.S. Securities and Exchange Commission, which needs to review initial public offering (IPO) filings.
- Then came the Supreme Court decision to undo the International Emergency Economic Powers Act tariffs, upending trade policy.
And after all that, the Iran conflict has roiled markets.
Iran conflict boosts energy commodities, but hurts bonds, stocks and gold
From a macro and markets perspective, the biggest impact of the conflict has been on energy, which has rallied significantly from the start of the conflict through the end of March (the relevant period for our IPO Pulses). European natural gas prices were up about 60%, while U.S. and global oil prices were up 40%-50% (black bars).
That’s because Iran effectively stopped traffic in the Strait of Hormuz – typically the route for 20% of global oil and liquefied natural gas supplies. The conflict has also damaged energy infrastructure across the Persian Gulf region, not just in Iran.
Chart 1: Attacks and Strait of Hormuz closure squeezing commodity supplies, increasing prices
But it wasn’t just energy commodities that saw prices rise. The Persian Gulf region is also a top exporter, often via the Strait of Hormuz, for other key commodities, including:
- Urea, a fertilizer produced using natural gas, has surged about +35%. The region also makes half the global supply.
- Aluminum has jumped around +10% as the region exports a tenth of global supply.
- Helium, which is an input in semiconductor manufacturing, is not exchange-traded but Qatar exports a third of global supply, so prices have increased.
The higher commodity prices have already boosted the price of gas at the pump, which affects inflation. U.S. headline CPI increased to 3.3% per annum in March, up from 2.4% in February. As a result, U.S. bond yields increased across the yield curve, with the fear that the Federal Reserve will need to raise rates to tackle inflation before it starts a wage-price spiral. U.S. 10-year Treasury yields are up 35 basis points from the start of the conflict through the end of March, meaning bond values fell.
Those higher yields hurt gold prices (-10%), too, making gold relatively less attractive since it doesn’t pay interest.
While bonds and gold haven’t played their usual role as safe-haven assets, the U.S. dollar has (+2%) to a degree. That’s been an added headwind to foreign equities (in dollar terms), which were down 10% or more, while U.S. equity indexes were down just 5%, although this difference also reflects that many foreign companies and economies are much more reliant on energy from the Strait of Hormuz.
Stocks not only sold off, but also were more volatile, moving with each new headline, which boosted the VIX by over 25% (red bar).
Still, between the U.S.-Iran ceasefire on April 8 and talks of a peace deal, a lot of these prices have reverted somewhat (circles), including U.S. equities recently rising to record highs.
Iran conflict knocks IPO Pulses from highs to lows… for now
The uncertainty caused by the Iran conflict (and the other disruptions this year) has meant that IPO activity got off to a slow start this year in the U.S. and Stockholm.
Nasdaq U.S. IPO Pulse
Coming into 2026, the first quarter seemed primed for a rebound as the record 43-day government shutdown in the fourth quarter of last year could have pushed some IPOs into the new year. But that hasn’t been the case for operating companies, with 26 IPOs in the first quarter – a 35% drop from the quarter prior.
Still, overall IPO activity (including special purpose acquisition companies) actually held up, with the first quarter seeing two more IPOs (88) than the fourth quarter (86) — and both quarters raised about $21 billion.
With the Iran conflict driving a selloff in stocks and increasing volatility, it’s weighed on the Nasdaq IPO Pulse, which fell to a nine-month low in March.
But, as we’ve noted before, for the IPO Pulse to truly signal a turn in IPO activity, its change in direction needs to last at least a few months. So far, the IPO Pulse is just two months removed from January’s 15-month high, meaning it’s too soon to suggest the broader uptrend in U.S. IPO activity is over, especially with U.S. equities recovering to record highs and volatility easing in April.
Chart 2: Nasdaq IPO Pulse drops to 9-month low, but too soon to call downturn
Nasdaq Stockholm IPO Pulse
Like in the U.S., Nasdaq Stockholm saw fewer new listings in the first quarter (3) than the fourth quarter of last year (5). Of course, in capital-raised terms, there’s no way to compete with the fourth quarter, when Stockholm had Europe’s biggest IPO in three years – Verisure (VSURE).
And, similar to its U.S. counterpart, the Nasdaq Stockholm IPO Pulse fell in March, dropping to a seven-month low. Here, too, since it’s just a one-month drop, it’s premature to call an end to the upturn in Stockholm IPO activity, especially with the IPO Pulse reaching a 20-month high in February. Plus, also like in the U.S., European stocks are nearing record highs in April.
Chart 3: Nasdaq Stockholm IPO Pulse dips to seven-month low from 20-month high
IPO Pulses not yet in downturns, so the first quarter may prove to be a blip
Given the ongoing Iran conflict and other disruptions in the first quarter, it’s no wonder IPO activity got off to a slow start in 2026.
Still, since the dips in the IPO Pulses fall well short of signaling a downturn in IPO activity and U.S. and European equities have rebounded in April, it’s entirely possible that the first quarter’s softer activity will prove to be a blip. We’ll see when we have our next update in July.
