Markets ‘dangerously complacent’ amid Iran-Israel tension: deVere

Global stock markets are showing a “dangerous complacency” in response to the sharp escalation of military conflict between Iran and Israel, warns the CEO of one of the world’s largest independent financial advisory organizations.

Despite the scale and significance of recent developments, investor behaviour reflects misplaced calm, with major indices rebounding quickly after a brief dip.

Nigel Green, CEO of deVere Group, comments: “The world is watching a direct confrontation between two major regional powers, and yet markets are treating it as background noise.

“This isn’t resilience, it’s a mispricing of risk. Investors are leaning into a narrative that no longer fits the facts.”

Following Israel’s airstrikes on Iranian infrastructure, the S&P 500 dropped 1.5% but quickly reversed. Brent crude surged 4.1% to a high of $91.17 a barrel before stabilising. Gold jumped to an all-time high of $2,431 an ounce, and energy stocks climbed across the board. Yet the VIX—Wall Street’s volatility index—remains subdued, holding near 13.0.

“These reactions are out of sync,” says Nigel Green.

“Gold and oil are reacting appropriately to heightened geopolitical risk. Equities are not. Volatility remains artificially low. That divergence should concern every serious investor.”

The latest military exchange follows Iran’s April 2024 launch of over 300 drones and missiles toward Israel, most of which were intercepted.

Israel’s recent counterstrikes mark a significant intensification, targeting infrastructure inside Iran—a move seen by many as a shift away from proxy warfare and toward direct state conflict.

The risks to global energy markets are growing. The Strait of Hormuz, which Iran could disrupt, carries roughly 17 million barrels of oil per day—nearly 20% of global supply.

Even the threat of closure or interference would “likely push oil well beyond $100 per barrel, reigniting inflation and altering the current trajectory of interest rate policy in developed economies.”

He continues: “Investors are clinging to a framework shaped by central bank support, solid earnings, and disinflation,” Nigel Green explains.

“But if energy prices rise sharply from here, that disinflation story evaporates. Rate cuts could stall. Market momentum could reverse.”

Gold’s breakout is one of the clearest signals. The precious metal is now up more than 20% year-to-date. The current price level of $2,430 per ounce “reflects deeper anxiety among institutional capital—even as broader markets appear relaxed.”

In contrast, the Nasdaq has continued to attract inflows, with megacap tech leading gains despite clear sensitivity to any increase in real yields, energy costs, or broad-based risk aversion.

“Too much capital is still positioned as if volatility is optional,” notes the deVere CEO.

“We’re advising clients to shift toward more robust positioning—adding to gold, defensive dividend payers, and select energy exposure while reducing overweights in overly optimistic growth segments.”

The Iran-Israel conflict is not occurring in isolation. It unfolds against a backdrop of high global fragility: renewed Chinese military pressure near Taiwan, ongoing war in Ukraine, and the political volatility of the Trump presidency in the US.

Markets have absorbed each headline in isolation, but “few are connecting the cumulative risk.”

Nigel Green adds: “The view that markets can power through every shock is no longer supported by the data.

“The conflict in the Middle East has entered a more dangerous phase. It has serious global and far-reaching implications for investors.”