Please see todays Brooks Macdonald Daily Investment Bulletin received this morning, 26/03/2026:
What has happened?
Iran continued to reject messages from the US aimed at de‑escalation, raising doubts over whether a credible off‑ramp to the conflict exists in the near term. That uncertainty pushed oil prices sharply higher, with Brent crude rising from around $97.30/bbl during the European session to close at $102.22/bbl in the US, before extending gains this morning to over $104/bbl. Despite higher energy prices, broader risk sentiment was relatively resilient. US equities advanced, with the S&P 500 up +0.54%, leaving it on track for its first weekly gain since the strikes began and up +1.31% over the past three sessions. Gains were supported by strength in the Mag-7, while smaller companies also performed well, with the Russell 2000 reaching a two‑week high. European equities posted similarly strong returns, with the STOXX 600 rising +1.42% to record its third consecutive daily gain and its highest level in a week.
Mixed diplomatic signals keep volatility elevated
Markets are weighing up mixed signals on the prospects for de‑escalation. US officials have pointed to ‘productive’ discussions and possible engagement via regional intermediaries, supporting hopes that diplomatic channels remain open. It has also been widely reported that the US has outlined a 15‑point plan, which could include dismantling Iran’s nuclear facilities and reopening the Strait of Hormuz. However, this has been met with pushback from Tehran. Iranian officials and state‑linked media have rejected indirect talks, reiterating that any end to hostilities would depend on Iran’s own terms, including security guarantees and recognition of its authority over the Strait of Hormuz. This mismatch in rhetoric has left oil prices highly sensitive to headlines and prone to sharp moves.
UK data reinforces a fragile mood
Away from geopolitics, UK economic data continues to point to a fragile domestic backdrop. Consumer confidence deteriorated sharply in March, with the British Retail Consortium’s expectations indicator falling to its weakest level since the survey began. Perceptions of the economic outlook over the next three months worsened notably, reinforcing signs that households remain cautious. Forward‑looking PMIs also slipped to six‑month lows, pointing to slowing activity alongside persistent cost pressures. Given that household consumption accounts for around two‑thirds of UK GDP, these indicators suggest demand may remain subdued in the near term.
What does Brooks Macdonald think?
Market attention is increasingly focused on the approaching end of President Trump’s five‑day deadline, announced on Monday, to delay potential strikes on Iranian power and energy infrastructure. With that window set to close in the coming days, and reports of an increased US military presence in the region, the risk of further escalation remains firmly on investors’ radar. At the same time, yesterday’s market behaviour highlights a degree of resilience, with equities holding up despite rising energy prices and geopolitical uncertainty.
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Andrew Lloyd
26/03/2026