Markets mull an end to war in Iran

Summary

Marketplace Morning Report – “Markets Mull an End to War in Iran”

Episode Date: May 6, 2026
Host: Sabri Benishore
Featured Guests: Russ Mold (Investment Director, AJ Bell), Javad Salehi Isfahani (Professor of Economics, Virginia Tech)

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Episode Overview

This episode covers the latest news on renewed peace negotiations between the U.S. and Iran amid ongoing war, focusing on resulting shifts in global oil markets, stock indices, and both American and Iranian economies. It features expert commentary from Russ Mold on market reactions and the root causes behind financial volatility, and from Javad Salehi Isfahani on Iran’s internal economic struggles and shifting public sentiment.

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Key Discussion Points and Insights

1. U.S.–Iran Peace Negotiations and Market Movements

• Peace Talks Resumed: Reports indicate the U.S. and Iran are nearing a deal that could end the ongoing war, featuring a moratorium on nuclear enrichment and the lifting of sanctions ([01:24]).
• Market Reactions:
  • Significant optimism in financial markets tied to ceasefire hopes.
  • S&P 500 and Nasdaq reached new record highs, in part due to easing war tensions.
  • Oil prices, after previous volatility, dropped below $100/barrel ([02:06]).
• Quote:
  • “They seem relieved that there’s been a backing off from those skirmishes after a day and that the ceasefire is held and that there is potential for a peace proposal on the table.”
    — Russ Mold ([02:06])

2. Gas Prices and Lagging Impact Despite Oil Drop

• Rising Gas Costs: Gas prices in the U.S. hit a new record: $4.50 per gallon, despite declining crude prices.
• Explanation:
  • Even if the peace deal passes, logistical delays in Middle Eastern oil shipments mean immediate relief at the pump is unlikely.
• Quote:
  • “It may not be an instant solution even if it happens as we all hope it will soon.”
    — Russ Mold ([03:02])

3. Market Optimism: Earnings vs. Geopolitics

• Tech Sector Strength:
  • AMD’s strong earnings and related tech/AI sector growth have been major drivers of stock market gains ([03:26]).
  • Companies like Intel, Micron, Qualcomm, Lambda Research, and Western Digital all contributing.
• Balancing Factors:
  • While geopolitical news drives short-term volatility, consistent corporate earnings provide enduring market strength.
• Quote:
  • “Earnings have been phenomenally strong in the first quarter. Tech has largely led the way… So yes, earnings probably have been a key factor in the strength that we’ve seen in the market since…the March lows.”
    — Russ Mold ([03:37])

4. Economic Hardship and Political Opinion Inside Iran

• Worsening Conditions:
  • Unemployment has reached a million, food prices are surging, and mass business closures are occurring ([06:02]).
• Shifting Blame:
  • Before the war, the Iranian population blamed government inefficiency and corruption.
  • Since the war, government has positioned itself as defender, redirecting public ire toward foreign adversaries.
• Memorable Explanation:
  • “Before the war, the average person would blame the government…since the war started, it’s as if all the damages the sanctions were causing became visible…So I think the government has reinvented itself, repositioned itself on the side of the people, opposing…President Trump and Prime Minister Netanyahu.”
    — Javad Salehi Isfahani ([06:40])
• Public Resilience:
  • Population is adapting to hardships; government repression stifles dissent.
  • Recent events have made Iranians less likely to see external conflict as a means to domestic change.
• Quote:
  • “Whereas maybe a fair size of the population … saw the possibility that aerial bombardment would help them get rid of the Islamic Republic, they now see it as mostly destroying productive capacity and making life much harder than it was.”
    — Javad Salehi Isfahani ([08:45])

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Notable Quotes & Memorable Moments

• Russ Mold on Markets:
  • “They’re possibly not paying quite so much attention to the presidential social media posts as they once were given the toing and froing.” ([02:06])
• On Delayed Gas Relief:
  • “It may not be an instant solution even if it happens as we all hope it will soon.” — Russ Mold ([03:02])
• On Shifting Blame in Iran:
  • “The government has reinvented itself, repositioned itself on the side of the people…” — Javad Salehi Isfahani ([06:40])
• Public Resilience:
  • “…you kind of get used to living in difficult times and marginal declines do not precipitate coming to the street and facing armed guards.” — Javad Salehi Isfahani ([08:19])

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Important Timestamps

• [01:24] – U.S.–Iran peace talks update; market and oil reaction recap
• [02:06] – Russ Mold on market sentiment post-ceasefire
• [03:02] – Gas price question and explanation of delayed effects
• [03:26] – AMD’s earnings and tech sector market impact
• [06:02] – Economic toll of the war inside Iran
• [06:40] – Who Iranians blame for hardship and changing attitudes
• [07:51] – Why public pressure is unlikely to force swift negotiation

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Tone and Takeaways

• The episode maintains a brisk, analytical tone, blending real-time market data with on-the-ground socioeconomic context in Iran.
• Both guests stress caution and uncertainty, but highlight the connections between geopolitics and economic pressures in both the U.S. and Iran.
• Listeners are left with a nuanced picture: markets are hopeful, but peace is not a panacea, especially for those inside Iran struggling amid ongoing upheaval.

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For a deeper dive into the economic realities within Iran, the full interview with Javad Salehi Isfahani is available at Marketplace.org.

Transcript

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[Sabri Benishore]

on again, off Again Peace negotiations are on again from Marketplace. I'm Sabri Benishore in New York. The US and Iran are reportedly back to working on an end to the war and sources say a deal is close. According to Reuters, Axios is reporting the deal would involve a moratorium on nuclear enrichment and an end to sanctions. Oil is down, markets are up. Russ Mold is investment director of the UK based investment platform AJ Bell and is here to talk about it all. Hi Russ.

[Russ Mold]

Good day to you Sabri. Hope you're well.

[Sabri Benishore]

So we have had so much back and forth. The straits open, the straits closed, peace deal coming, Peace deal failed. Are markets taking this time seriously?

[Russ Mold]

They're taking it all very seriously. They're possibly not paying quite so much attention to the presidential social media posts as they once were given the toing and froing. But I think they were worried about the potential for an escalation between Washington and Tehran yesterday. So they seem relieved that there's been a backing off from those skirmishes after a day and that the ceasefire is held and that there is potential for a peace proposal on the table. And you can see that reflected in how The S&P 500 Nasdaq stock indices hit record highs on Tuesday and how the oil price on the West Texas Intermediate benchmark for the US has gone back below $100 a barrel.

[Sabri Benishore]

Yeah, you know, oil prices, they have gone up, they have gone down, currently down as you mentioned. But gas prices, they just keep going up in the US $4.50 a gallon is where they're at today, which is a record. Why is that and would gas prices continue to rise even if the war winds down?

[Russ Mold]

Clearly, if there is a peaceful solution that frees up the release of crude and means that we finance can get supply. You would like to think over time the price of gasoline at the pump will come down, but it may take time given that tankers need to get back to the Middle East. They'll need to put the stuff in the ship, they'll need to get the ship to the right destination. So it may not be an instant solution even if it happens as we all hope it will soon.

[Sabri Benishore]

AMD reported earnings. It projected very strong growth. Its stock shot up. How much have earnings played a role in the stock market's record numbers as opposed to news from the war?

[Russ Mold]

Markets have been pleased to see a ceasefire and they've taken the view that if things aren't escalating, then at some stage they're going to de escalate and there'll be a peaceful solution. Equally, as you say Sabri, earnings have been phenomenally strong in the first quarter. Tech has largely led the way. You saw that from AMD yesterday. And you look at the leading stocks in The S&P 500, Intel, Micron, Qualcomm, Lambda Research and Western Digital, all tech stocks, all related to AI and that theme. So yes, earnings probably have been a key factor in the strength that we've seen in the market since, you know, the March lows.

[Sabri Benishore]

Russ Mold, Investment director at AJ Bell. Thank you so much.

[Russ Mold]

Appreciate your time.

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[Sabri Benishore]

So a peace deal may or may not be coming. But meanwhile, inside Iran, the economy is suffering. A million people are out of work. Food prices are spiking, businesses are closing. Before the war, economic pressure contributed to mass anti government protests. Now the Iranian people are facing new economic hardships. Javad Salehi Isfahani is a professor of economics at Virginia Tech and is here to talk about it. Good morning.

[Javad Salehi Isfahani]

Good morning.

[Sabri Benishore]

This is kind of a fraught question, but who do you think Iranians blame for this economic situation?

[Javad Salehi Isfahani]

Well, that's a very interesting question too, because the answer to it has changed since the war started. I think before the war, the average person would blame the government because sanctions were kind of an invisible barrier. And it was easy to blame high prices and shortages on these two favorite explanations, inefficiency and corruption, mismanagement and corruption. You constantly hurt that. But since the war started, it's as if all the damages the sanctions were causing became visible and the government, not only it wasn't standing by the side, it was actively trying to help people survive this. So I think the government has reinvented itself, repositioned itself on the side of the people, opposing these two characters that are not very much like in Iran at all, President Trump and Prime Minister Netanyahu.

[Sabri Benishore]

So it sounds like this experience has galvanized the Iranian people. Does that mean economic pressure would not as easily be able to force Iranian leaders to negotiate a quicker end to the war, do you think?

[Javad Salehi Isfahani]

Yes, I think that is fair to say, and partly because the government also has a strong repressive apparatus. So the opposition is cramped. Under the circumstances, they can't really do a whole lot. I suspect that Iranians can manage another maybe 20, 30% decline in living standards. They've already lost quite a bit in the last year. And in a situation like that, you kind of get used to living in difficult times and marginal declines do not precipitate coming to the street and facing armed guards. So, you know, that's a situation that's very difficult from the distance from my position to read, but I can tell you that opinions about the war have changed drastically. Whereas maybe a fair size of the population, maybe a majority, saw the possibility that aerial bombardment would help them get rid of the Islamic Republic, they now see it as mostly destroying productive capacity and making life much harder than it was.

[Sabri Benishore]

Javad Salehi Isfahani, professor of Economics at Virginia Tech thank you so much. Thank you a lot more to that [e-mail] I'm Sabri Benishore with the Marketplace Morning Report from APM. American Public Media

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