Here's My Strategy Amid the Iran Turmoil

U.S.-Iran Escalation: 3 Things to Expect in the Market Now

The clock sprang forward by an hour on Sunday for most of the nation. And, still, the markets and the economy feel like they are in a different time zone as the Ides of March rapidly approach. How this month goes could well determine the direction of the market and economy for the rest of 2026. Investors face major challenges on several key fronts.

Obviously, the most critical concern right now is the unfolding situation in the Middle East after oil spiked 35% last week on the effective closure of the Strait of Hormuz. Oil futures were surging in pre-market trading on Monday. Gulf states are starting to shut down production and energy prices could move much higher depending on the events on the ground. The official narrative from the administration and most of the media is that American casualties are very low and that Iran’s capacity to hit U.S. military assets and other countries in the region is dramatically being diminished by continual bombing from U.S. and Israel.

I really hope that view reflects reality in the coming week. But I have significant doubts, and the Fog of War could play out in ways that could impact the markets and economy in major ways in the weeks ahead. It is easy to see multiple scenarios that could push oil to $120/barrel and beyond. To state the obvious, that would trigger a huge spike in volatility and push equities much lower. If sustained long enough, it also could trigger a recession.

And all this is occurring when the U.S. economy is already in a precarious position. With recent revisions, job growth in 2025 was just 15,000 a month. Friday saw the February Bureau of Labor Statistics report print a reading that showed 92,000 jobs were lost last month, badly missing expectations. The AI narrative is starting to develop some cracks as well. Oracle (ORCL) is announcing layoffs to free up capital to fund its massive AI infrastructure build out which will result in substantially negative free cash flow over the next several years. In addition, Oracle along with its partner OpenAI decided not to expand their data center site in Abilene, Texas, which is part of the massive Stargate project from 1.2gw to 2gw.

Then, we have the credit market where a new cockroach or two is appearing every week it seems. Last week, Blackrock (BLK) marked a $25 million loan that had a 100% value three months ago, to zero. They also curbed some redemptions in one of their largest private credit funds late last week. News of which pushed the stock down nearly eight percent in trading on Friday.

In summary, things are getting extremely choppy here in March. My take is that things are going to get worse on several of these fronts before they can potentially get better. Therefore, my portfolio allocation continues to be positioned extremely cautiously. Just over 25% of my holdings are in short-term Treasuries and cash. Almost all the rest is within covered-call holdings on the few stocks in this overbought market I am finding with reasonable valuations.

I will buy any further dips in equities incrementally using covered call orders. I will concentrate on defensive sectors like healthcare and consumer staples. Given heightened credit concerns, I will also ensure all potential targets have rock-solid balance sheets as it feels like the month of March could turn out to be more than a rocky one for investors.

At the time of publication, Jensen had no position in any security mentioned.