Wall Street and defense companies reap benefits from Iran conflict

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Global Economic Outlook Downgraded Due to Ongoing Conflict

The International Monetary Fund has revised its global growth forecast for 2026 downward, citing the impact of the ongoing conflict between the United States and Iran on the world economy. The fund now predicts global growth at 3.1 percent, down from an initial estimate of 3.3 percent.

The war has resulted in damage to energy infrastructure across the Gulf region, while critical exports such as oil, gas, chemicals, and fertilizers remain stranded due to Iran’s shutdown of the Strait of Hormuz and the subsequent US naval blockade of Iranian ports. This has led to concerns about the potential for a prolonged conflict, which could further impact global growth.

However, some industries are experiencing significant growth despite the economic uncertainty. Investment banks have seen an increase in trading activity, with clients seeking to reposition their portfolios frequently. As a result, spreads tend to increase, benefiting trade intermediaries such as banks.

According to recent first-quarter results, Morgan Stanley reported a profit of $5.57 billion, up 29 percent year-over-year, while Goldman Sachs reported a profit of $5.63 billion, up 19 percent year-over-year. JP Morgan Chase also saw significant gains, with first-quarter earnings of $16.49 billion, up 13 percent year-over-year.

In addition to the banking sector, other industries are also experiencing growth. The cryptocurrency-based prediction platform Polymarket has seen significant revenue since the start of the month, earning upwards of $1 million per day through peer-to-peer bets on various events. The platform’s revised fee structure has resulted in increased revenue, with more than $21 million in fees generated since April 1.

Other platforms, such as Kalshi, Novig, and Robinhood, also operate under a similar business model, but Polymarket has been the standout winner due to its ability to allow users to bet on conflicts like the Iran war.

Source: Al Jazeera