Stock market outlook 03/2026: The markets under the spell of the Middle East conflict

March 4, 2026

What has been the focus in recent weeks

February was a positive month for investors overall. The global growth picture remained more robust than many had feared in 2025, with upward revisions for economic growth in the US and a constructive global growth outlook overall. The environment was therefore characterized by solid economic data, falling inflation risks and continued supportive fiscal policy as well as relatively loose financing conditions for companies.

The company results presented for the fourth quarter of 2025 also showed a positive picture overall.

In the US, however, the question marks surrounding the sustainability of the immense investments in AI Artificial intelligence on the one hand and the disruption of individual sectors through AI on the other were becoming increasingly apparent. Individual share segments reacted correspondingly nervously. The erratic trade policy of the US further exacerbated these market movements.

European and Swiss equities as well as Asian markets and emerging markets in particular were among the winners. Investors increased their equity exposure here at the expense of the USA.

' Solid economic data recently met with rising geopolitical risks '

Finally, in the last few days, the focus on the markets has shifted unilaterally to the conflict in the Middle East. With the exception of oil company stocks, practically all equity segments came under heavy pressure. Gold was relatively stable overall and the price of oil rose sharply. On the currency side, the US dollar was in demand.

Our investment solutions and positioning

Our multi-asset solutions once again made gains across all profiles in February. We owe this primarily to our significant positioning in Swiss equities, but also to equity investments outside the United States in general. For once, gold was not one of the high-flyers, but in our opinion it still belongs in any diversified investment strategy. In recent days, government bonds and uncorrelated investments have shown their advantages and were able to cushion the global turbulence slightly.

The positive development of our Cross-Asset Fund Navigator in February resulted primarily from overweights in industrial, commodity and basic materials stocks and underweights in cyclical consumer and financial stocks. Allocations to emerging markets and Japan also made a positive contribution to performance. In the recent period of volatility following the US Supreme Court's tariff decision and the attacks in the Middle East, US bonds had a stabilizing effect.

In our equity strategy Global Equity Trends almost all of our investments contributed to the positive performance in February. While stocks from the basic materials and energy sectors were among the winners, the communications and financials sectors were at the bottom of the ranking. As a result, we divested ourselves of the aforementioned sectors at the end of the month and instead entered into new exposures in utilities, consumer staples and healthcare companies. The focus for the coming weeks was therefore clearly more defensive.

Our Swiss equity strategy Swiss Equity Selection has made further gains in recent weeks. Large-cap companies such as Nestlé and Novartis were among the top performers. UBS and Holcim shares have struggled more. However, both remain attractive in the long term and investors are happy to take advantage of setbacks to make purchases. Despite the recent correction, we believe that the Swiss equity market in general continues to offer very good opportunities.

Thanks to the latest adjustments to our equity strategy Global Equity Selection we were not severely affected by the decline in software companies. The reduction of the US share in favor of other markets has also been successful so far. The top performers in the portfolio were all from Europe. Thanks to the broader diversification across sectors and countries, we believe we are well positioned even in more volatile times.

What next? And what needs to be considered?

Following the US and Israeli airstrikes on Iran, the focus of the markets has shifted completely to geopolitics. Even if there were occasional panic-like movements on the markets, these have largely corrected themselves again and again. As far as the further impact on the markets is concerned, it naturally depends on the extent and duration of the conflict, whereby two main scenarios are possible:

A short conflict and the neutralization of Iran's nuclear and ballistic missile capabilities. This can probably be achieved purely through air strikes. Given the pressure from Trump's voter base (anti-war, not unanimously pro-Israel) as well as the risks of high oil prices and the upcoming midterm elections in November, a 'deal' seems possible in the short term. In addition, the Iranian regime has been severely weakened. This would be favorable or neutral for the markets. This is currently the central scenario for us.

' After comparable geopolitical crises in the past, the markets usually recovered relatively quickly '

Focus on a regime change that leads to a prolonged conflict, that is the second scenario: longer, more extensive, more dangerous. This would affect risk appetite for a longer period of time and support safe havens and thus typically investments such as gold.

Short-term tactical maneuvers in asset investment are not possible in such a situation. We clearly recommend remaining invested and sticking to an overall diversified asset allocation.

We currently continue to believe that the opportunities for a positive investment year in 2026 are intact. Our fundamental assessment has not changed: Positive economic growth – not least thanks to solid consumer spending – good corporate results and increasing liquidity on the markets. Accordingly, we feel well positioned and have not yet made any changes to our positioning or the strategy of our investment solutions.

After comparable geopolitical crises in the past, the markets usually recovered relatively quickly. However, we are of course monitoring the current situation very closely and will reassess the situation in the event of a further escalation.

Point Capital Group
4. March 2026

Our experts: Jules Kappeler (CEO) & Christian Sutter (Portfolio Manager)