Markets are being roiled by the Iran conflict, but it's not a panic yet. Investors are looking for a firm timeframe for the end of the fighting amid confusing signals about a potential negotiation.

Stocks are finely balanced between a " buy the dip" mentality and fears of a major energy shock. Hot trades such as silver, the memory-chip players, and South Korea's market are suffering as traders take money off the table, but at the same time there is evidence of bargain hunting in beaten-down sectors such as software and even cryptocurrencies. Things could easily tip one way or the other.

What investors really want is assurance from the U.S. government that it can end the pain in energy markets and therefore the threat of surging inflation. Oil prices have had their biggest two-day jump since the postpandemic recovery in 2020. President Donald Trump's suggestion the U.S. will escort tankers through the Strait of Hormuz "as soon as possible" and provide risk insurance for ships traveling in the area seemed to provide only temporary relief, with investors noting Iranian warnings of missile and drone attacks.

The lack of a clear timeframe for the end to the conflict is forcing some reassessment. Goldman Sachs analysts on Wednesday raised their oil price forecast for Brent crude -- the international standard -- to $76 a barrel from $66 previously. That wouldn't be a disaster by any means but at the same time Goldman warned that a five-week closure of the Strait of Hormuz would likely push Brent prices to $100 a barrel. It's not a scenario that can be easily discounted until there are clearer signs of negotiations with Iran, although a New York Times report on Wednesday that Iranian intelligence officials had reached out secretly to their American counterparts might offer some grounds for optimism.

So far, the market is undergoing a rotation rather than a rout. But the longer the conflict lasts and the higher oil prices go, the greater the likelihood of a much bigger selloff.

-- Adam Clark

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How Iran Conflict Could Complicate Trump's Domestic Agenda

The broadening Middle East conflict could be time-consuming for Congress, putting a significant part of President Donald Trump's domestic agenda at risk. Not only are lawmakers already racing to pass housing and crypto bills the White House has supported, they still have to finalize funding for the Department of Homeland Security.

   -- The first is a housing bill that includes a section designed to prevent 
      large institutional investors such as Blackstone from buying 
      single-family homes. The second, more complicated, endeavor is a bill 
      that would set the rules for the cryptocurrency industry, a longtime goal 
      of crypto companies like Coinbase Global. 
 
   -- Those bills sat on shaky ground even before the U.S. and Israel attacked 
      Iran. Depending on how the war unfolds, the conflict could dim the 
      prospects for one or both of the bills to pass this year. More 
      immediately, Democrats expect the Senate to vote today on a resolution to 
      restrict Trump's use of force against Iran. 
 
   -- The Iran conflict also is putting greater focus on funding DHS, which has 
      been partially shut down since mid-February amid a standoff on 
      immigration enforcement. Some Republicans are using the Iran attacks to 
      put pressure on Democrats to relent on their demands for reforms to 
      Immigration and Customs Enforcement. 
 
   -- The easier lift for Congress is housing. This week, the Senate plans to 
      vote on a bill that would make it easier to build manufactured homes, 
      reduce environmental reviews and other inspections for housing 
      construction, and make other changes to make it easier to build or 
      renovate homes. 

What's Next: A procedural step to advance the bill passed on Monday with wide bipartisan support, and the Senate is expected to vote on final passage of the bill in the coming days. The House would still have to pass the bill before it would land on Trump's desk for signature.

-- Joe Light

Trump Shares Ideas for Lowering Energy Prices Amid Conflict

Rising oil and gasoline prices -- driven higher because of the U.S. military actions in Iran -- have the White House rushing to alleviate the pressure. President Trump ordered a federal agency to guarantee maritime trade through the Strait of Hormuz, a key energy transport route that has been choked by the attacks.

   -- Trump ordered the U.S. International Development Finance Corporation to 
      provide political risk insurance and guarantees for maritime trade moving 
      through the Persian Gulf, saying the Navy would escort tankers through 
      the Strait if necessary. Marine insurers have withdrawn or sharply 
      repriced war-risk coverage for vessels operating near Iran. 
 
   -- Brent crude is up 33% this year, near $81 a barrel and a new 52-week 
      high. Average gasoline prices crossed $3.11 a gallon for the first time 
      since November. A $10 jump in oil is roughly 24 cents at the pump, said 
      Denton Cinquegrana, chief oil analyst at OPIS. 
 
   -- The administration could release crude from the Strategic Petroleum 
      Reserve's 714-million-barrel capacity. But traders caution that it may 
      not help much, given that the bottleneck is vessel availability. If 
      tankers are tied up, additional barrels released from the U.S. Gulf Coast 
      cannot move as efficiently into global markets. 
 
   -- The world daily consumes roughly 100 million barrels of oil. Even a large 
      SPR release of 1 million barrels a day would offset just 1% of global 
      demand. The administration may prefer other tools. Cinquegrana points to 
      three: waiving summer gasoline volatility rules, expanding ethanol use, 
      and suspending the federal gasoline tax. 

What's Next: The federal gasoline tax is 18.4 cents a gallon, and suspending it would require congressional action. Even if enacted, the pass-through to consumers is not guaranteed, and it would not change crude supply or global balances. It would also reduce Highway Trust Fund revenue unless offset elsewhere.

-- Laura Sanicola and Janet H. Cho

Trump Still Using Trade Threats as a Tool and a Cudgel

The administration again turned to trade as a tool to achieve various aims and as a cudgel. This time the target was Spain. President Trump threatened to withdraw trade with Spain for its response to the U.S. strikes on Iran and its unwillingness to raise its NATO contribution.

   -- During an Oval Office meeting with German Chancellor Friedrich Merz and 
      journalists present, Trump said he instructed Treasury Secretary Scott 
      Bessent to cut off "all dealings" with Spain, a fellow NATO member. Spain 
      had denied the U.S. access to its air bases for the Iran strikes. 
 
   -- Trump also criticized British Prime Minister Keir Starmer, saying the 
      U.K. had been "uncooperative" on various fronts, including Iran, the 
      U.K.'s approach to energy in the North Sea, and illegal immigration. The 
      U.K. didn't immediately allow the U.S. to use its bases to strike Iran. 
 
   -- On tariffs, Trump cast the administration's recent defeat at the Supreme 
      Court as a victory. The Court's decision that invalidated his broad-based 
      tariffs using the International Emergency Economic Powers Act also made 
      clear he had other avenues to control trade -- mentioning licenses as 
      well as embargoes. 
 
   -- After that decision, Trump imposed 10% universal tariffs under Section 
      122 of the Trade Act of 1974 as a bridge for 150 days until it completes 
      investigations under Section 301. Trade Representative Jamieson Greer 
      said Tuesday he expected to have those investigations finished by the end 
      of the 150 days. 

What's Next: Trump also said the current tariffs were at 15%, a level he mentioned previously in a social media post but hasn't updated by executive order after imposing the 10% level. A White House official told Barron's that the administration continues to work on implementing the president's 15% tariff.

-- Reshma Kapadia and Anita Hamilton

Blackstone's Fund Redemptions Revive Private Credit Fears

Blackstone's flagship private credit fund faced a wave of redemptions in the first quarter, allowing investors to redeem 7% of the funds' $48 billion in net assets. The disclosure is the latest negative read-through for the private credit industry, after Blue Owl Capital triggered last month's private credit panic.

   -- The 7% exceeds the typical 5% withdrawal limit for investors in the 
      nontraded business development company fund. Another 0.9% redemption 
      request was offset by a $400 million investment from the firm and its 
      employees. 
 
   -- Blackstone allowed investors to pull a total $3.7 billion from the fund, 
      commonly referred to as BCRED. It is the industry's largest nontraded BDC, 
      with $82 billion in gross assets. The fund saw $2 billion in new 
      commitments, leaving it with $1.7 billion worth of net withdrawals. 
 
   -- Blackstone used its own capital to meet the upsized redemptions to avoid 
      having to redraft its original tender offer. "These investments were 
      about meeting 100% of requests for the quarter with certainty and 
      timeliness. They underscore our conviction in BCRED and alignment with 
      its investors," Blackstone told Barron's. 
 
   -- Blackstone noted that 95% of the fund's 700 positions are senior secured 
      loans. Blackstone President Jon Gray told CNBC that despite "a ton of 
      noise," the more than 400 borrowers BCRED invests in had 10% growth in 
      earnings before interest, taxes, depreciation, and amortization last 
      year. 

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