Impact of U.S.-Iran War on Consumer Spending
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: CNBC
- Lower-Income Strain: The U.S.-Iran war has led to rising oil prices, causing annual spending growth rates for lower-income households to slow significantly by March 21, highlighting the direct impact of energy costs on their economic situation and exacerbating economic inequality.
- Stable High-Income Spending: While higher-income households maintain stable spending growth rates, consumer sentiment fell over three points to 53.3 in March, indicating that even with the support of the wealth effect, their concerns about the economic outlook are increasing.
- Market Volatility Risks: High-income households have supported U.S. consumer spending in recent years, but Goldman Sachs warns that a 10% drop in the stock market could reduce GDP by 0.5% in 2026, while a 20% drop could lead to a full percentage point decrease, reflecting economic fragility.
- Investor Caution: As the Middle East conflict continues, investor trading activity has virtually stalled, indicating heightened uncertainty about the future, particularly affecting high-income groups' investment behaviors, which could lead to increased risks to overall consumer spending.
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Analyst Views on GS
Wall Street analysts forecast GS stock price to rise
12 Analyst Rating
5 Buy
7 Hold
0 Sell
Moderate Buy
Current: 807.600
Low
604.00
Averages
951.45
High
1100
Current: 807.600
Low
604.00
Averages
951.45
High
1100
About GS
The Goldman Sachs Group, Inc. is a global financial institution that delivers a range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Its segments include Global Banking & Markets, Asset & Wealth Management and Platform Solutions. The Global Banking & Markets segment offers a range of services, including financing, advisory services, risk distribution, and hedging for its institutional and corporate clients. It facilitates client transactions and makes markets in fixed income, equity, currency and commodity products. The Asset & Wealth Management segment manages assets and offers investment products across all asset classes to a diverse set of clients. It also provides investing and wealth advisory solutions. The Platform Solutions segment includes consumer platforms, such as partnerships offering credit cards and point-of-sale financing, and transaction banking and other platform businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Impact of U.S.-Iran War on Consumer Spending
- Lower-Income Strain: The U.S.-Iran war has led to rising oil prices, causing annual spending growth rates for lower-income households to slow significantly by March 21, highlighting the direct impact of energy costs on their economic situation and exacerbating economic inequality.
- Stable High-Income Spending: While higher-income households maintain stable spending growth rates, consumer sentiment fell over three points to 53.3 in March, indicating that even with the support of the wealth effect, their concerns about the economic outlook are increasing.
- Market Volatility Risks: High-income households have supported U.S. consumer spending in recent years, but Goldman Sachs warns that a 10% drop in the stock market could reduce GDP by 0.5% in 2026, while a 20% drop could lead to a full percentage point decrease, reflecting economic fragility.
- Investor Caution: As the Middle East conflict continues, investor trading activity has virtually stalled, indicating heightened uncertainty about the future, particularly affecting high-income groups' investment behaviors, which could lead to increased risks to overall consumer spending.
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- Rising Bond Yields: Government borrowing costs have surged, with bond yields steadily increasing throughout March as markets reprice the likelihood of central bank rate hikes, pushing some European bond yields to multi-decade highs, indicating heightened inflation concerns.
- Currency Market Turbulence: The dollar index is projected to gain around 3% in March, supported by energy-driven stagflation risks; however, a potential decline in oil prices in the second half of 2026 could weaken the dollar, reflecting the market's complex expectations for future economic conditions.
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- Collaborative Technological Edge: By partnering with life sciences companies, Nvidia can validate its models in labs, leveraging digital twins and simulation to enhance the quality of experiments and manufacturing while reducing costs, thereby strengthening its market position.
- Investment and Applications: In 2023, Nvidia invested $50 million in clinical-stage biotech firm Recursion Pharmaceuticals to develop AI models for accelerating drug discovery, driving technological advancements in the biopharma sector.
- Clinical Trial Efficiency Gains: Recursion's AI technology enables drugmakers to synthesize 90% fewer compounds and reduces the average time to enter human trials from 42 months to 17 months, significantly improving research and development efficiency.
See More
Impact of U.S.-Iran War on Consumer Spending
- Lower-Income Strain: The U.S.-Iran war has led to rising oil prices, causing annual spending growth rates for lower-income households to slow significantly by March 21, highlighting the direct impact of energy costs on their economic situation and exacerbating economic inequality.
- Stable High-Income Spending: While higher-income households maintain stable spending growth rates, consumer sentiment fell over three points to 53.3 in March, indicating that even with the support of the wealth effect, their concerns about the economic outlook are increasing.
- Market Volatility Risks: High-income households have supported U.S. consumer spending in recent years, but Goldman Sachs warns that a 10% drop in the stock market could reduce GDP by 0.5% in 2026, while a 20% drop could lead to a full percentage point decrease, reflecting economic fragility.
- Investor Caution: As the Middle East conflict continues, investor trading activity has virtually stalled, indicating heightened uncertainty about the future, particularly affecting high-income groups' investment behaviors, which could lead to increased risks to overall consumer spending.
See More
Global Markets Face Severe Volatility Amid U.S.-Iran War
- Equity Market Decline: The ongoing U.S.-Iran war has led to a sell-off in global equities, with South Korea's Kospi index plummeting nearly 20% in March, highlighting the market's sensitivity to energy shocks and reflecting concerns over future economic growth.
- Rising Bond Yields: Government borrowing costs have surged, with bond yields steadily increasing throughout March as markets reprice the likelihood of central bank rate hikes, pushing some European bond yields to multi-decade highs, indicating heightened inflation concerns.
- Currency Market Turbulence: The dollar index is projected to gain around 3% in March, supported by energy-driven stagflation risks; however, a potential decline in oil prices in the second half of 2026 could weaken the dollar, reflecting the market's complex expectations for future economic conditions.
- Volatile Metals Market: Gold is on track for its worst monthly performance since 2008, yet many market watchers maintain a bullish outlook, forecasting a rebound to $6,200 per ounce by the end of June, indicating ongoing demand for safe-haven assets amid uncertainty.
See More
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- Gold Price Increase: Gold prices rose on Thursday as the escalating Middle East conflict drove investors towards safe-haven assets, with spot gold trading approximately 1% higher at $4,553.69 per ounce, indicating increased demand for security amid geopolitical tensions.
- Monthly Decline Trend: Despite the recent uptick, gold is on track for its largest monthly decline in nearly 17 years, projected to drop by 14.6%, marking the biggest monthly drop since October 2008, which highlights significant market uncertainty and volatility.
- Investor Sentiment Shift: Investment Manager Wayne Nutland noted that the trading dynamics of gold have changed over the past four years, particularly after the Ukraine war, where traditional correlations with real bond yields and the U.S. dollar have been disrupted, leading to increased price volatility.
- Future Outlook: Analysts at Goldman Sachs forecast that despite the recent sell-off, gold prices could reach $5,400 per ounce by the end of 2026, driven by central bank diversification and normalization of speculative positioning, suggesting a more optimistic medium-term outlook.
See More
Iran War Intensifies Global Shortages of Tungsten and Other Commodities
- Tungsten Price Surge: Tungsten prices exceeded $3,000 last week, marking over a 50% increase for the month, indicating strong demand in the defense sector despite significant inventory shortages due to the Iran war.
- Rising Sulfuric Acid Prices: Sulfuric acid prices in Africa have risen at least 30% since the onset of the war, while China's sulfur prices increased by approximately 13% from early March, reflecting ongoing demand pressures that could lead to severe supply shocks.
- Helium Supply Tightness: Helium prices have roughly doubled since the Iran war began, particularly after missile attacks on a key industrial center in Qatar, complicating the restoration of global helium supplies and exacerbating market tightness.
- Global Commodity Market Turmoil: The supply chain disruptions caused by the Iran war present new challenges for global markets, prompting companies to diversify their supply sources while China ramps up stockpiling plans, highlighting concerns over future supply uncertainties.
See More
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- Analyst Price Target Increase: H.C. Wainwright's analyst Amit Dayal raised Calumet's price target from $33 to $60, reflecting optimism about the company's renewable fuels business benefiting from energy market volatility, potentially driving an upside of over 87%.
- Stock Price Surge: Following the analyst's new rating, Calumet's stock rose 10.9% today, continuing a rise of more than 14% last week, indicating strong market confidence in its future performance.
- Financial Health Improvement: Calumet's cost-reduction initiative in 2025 significantly boosted cash from operations, rising to $108.9 million from a negative $6.4 million in 2024, showcasing a substantial improvement in financial health that enhances investor confidence.
- Positive Market Response: In addition to H.C. Wainwright, TD Cowen and Goldman Sachs have also raised their price targets to $25 and $34 respectively, reflecting an overall optimistic sentiment in the market towards Calumet, further solidifying its investment value as a materials stock.
See More
