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Investment Market Update – April 2026

Investment Market Update – April 2026: How the Iran conflict is impacting markets and investments…

Geopolitical events can feel unsettling, particularly when each update dominates headlines and coincides with investment market volatility, and the ongoing conflict involving Iran, the United States and regional allies through March & April 2026 is one such event creating uncertainty across global markets. You may be wondering what it all means for your investments, and whether you should be doing anything differently.

The short answer is this: while markets have reacted, the impact so far has been measured rather than severe. More importantly, history shows that reacting emotionally to short-term events often leads to poorer long-term outcomes. This update will walk you through what’s happening in markets, what it means for the global economy, and how your portfolio is positioned in response.

What’s Happening in Markets

Since the conflict escalated, global markets have adjusted to a higher level of uncertainty rather than reacting sharply to each new development. The most significant impact has been on energy markets, with oil prices remaining elevated due to disruptions through the Strait of Hormuz. While early concerns suggested a major supply shock, alternative shipping routes and increased production from other countries have helped stabilise supply to some extent.

Equity markets have softened, with global indices experiencing a pullback of around 10%. While this can feel uncomfortable, it’s important to recognise that corrections of this size are relatively common, particularly during periods of geopolitical tension. At this stage, markets are not pricing in a severe or prolonged downturn.

Bond markets have also responded, with higher energy prices raising the possibility that inflation could remain elevated for longer. This has led to some upward pressure on interest rate expectations, though not to a level that suggests a major shift in economic conditions.

Economic Impact

Despite ongoing tensions, the broader economic impact appears manageable. Higher oil prices are expected to act as a modest drag on global growth, particularly in energy-importing regions such as Asia and Europe. These economies are more sensitive to energy costs, which can flow through to production, transport, and ultimately consumer prices.

The United States remains relatively resilient due to its lower reliance on imported energy and continued strength in key sectors. Corporate earnings expectations, particularly in the US, remain stable, which is an important support for global equity markets.

Australia may experience some short-term supply pressures, particularly given its limited domestic refining capacity and storage. However, as a high-income country, Australia is well positioned to secure energy supply, even if prices remain elevated.

Current estimates suggest a modest reduction in global growth, rather than a significant economic shock. Importantly, markets tend to respond more dramatically when earnings expectations deteriorate, which has not occurred at this stage.

What This Means for Your Portfolio

Periods like this highlight the value of disciplined, diversified portfolio construction rather than attempting to predict geopolitical outcomes (which is inherently uncertain) with portfolios designed to remain resilient across a range of scenarios. For our clients invested in Separately Managed Accounts (SMAs), we have confidence in the portfolio managers we use have the experience, depth of knowledge and resources to manage risk and make the required changes within portfolios.

Currently, optimal positioning reflects a world where inflation risks remain slightly elevated. This includes exposure to assets that can perform in a higher inflation environment, reduced sensitivity to sharp interest rate movements, and broad diversification across asset classes, regions and investment styles.

Importantly, no material changes to portfolio strategy are warranted based on current information. While it may feel tempting to “do something” during periods of uncertainty, making reactive decisions such as exiting markets or significantly shifting asset allocation can be detrimental to long-term returns. History consistently shows that markets recover as uncertainty eases and the economic impact becomes clearer. Missing even a small number of recovery periods can have a meaningful impact on long-term performance.

That said, it is important to continue to monitor developments closely. If the situation escalates in a way that materially impacts global growth or corporate earnings (for example, through sustained damage to energy infrastructure or prolonged disruption to key shipping routes), the portfolio positioning should be reassessed.

What Now?

The Iran conflict is a reminder that geopolitical events are a normal part of investing. While they can create short-term volatility, they do not always translate into long-term market disruption. It is important to remember that markets can recover relatively quickly from incidents like this. You may recall that the S&P/ASX 200 peaked in late February 2020, just before COVID 19 lockdown fears hit markets. The index fell roughly 35% and bottomed in late March 2020 – one of the fastest bear markets on record. The ASX 200 then regained its February 2020 level in early January 2021, when the index closed at levels last seen before the pandemic.

At present, the most likely outcome remains a moderate economic impact rather than a severe downturn. Markets have adjusted, energy supply concerns have been partially mitigated, and corporate earnings remain resilient.

For you as an investor, the most important action is often inaction. This means:

• Staying focused on your long-term objectives,
• Maintaining a diversified portfolio,
• Avoiding decisions driven by short-term noise,
• Consulting with your financial adviser if you have any concerns or need reassurance.

If you would like to discuss your portfolio or better understand how investment market conditions may impact your strategy through April 2026 and beyond, we’re here to help. You can reach our Wealth team on (08) 9301 2200, or via our website.

Please note the information provided within this article is general of nature and is not a personal advice recommendation. Prior to considering strategies discussed in this article we recommend you seek personal financial advice. Please be aware that, without the benefit of financial advice, you may be committing yourself to financial strategies or products that are not appropriate for your overall personal situation, needs and objectives.

written by:

Justin McMillan

Financial Adviser Justin McMillan has been with McKinley Plowman for several years, following our acquisition of his practice Smartwealth. He firmly believes that while financials, investments, and strategies are important in an individual's financial plan, they are simply the vehicles to allow clients to get where they want to be. Justin takes a holistic and rounded approach and focuses on the individual, taking the time to listen and understand what drives and motivates his clients.