By Winnie Hsu, Nick Heubeck and Monique Mulima
The prospect of a prolonged Iran war and elevated oil prices is prompting stock investors to reassess a broader array of industries, including less obvious targets from food delivery firms to cosmetics makers as supply disruption intensifies.
Global stocks have lost 5.5 per cent since the conflict began, heading for their worst monthly performance since 2022, with Asia being the hardest hit. Traders — wary of resurgent inflation and the mounting cost of the war adding to budget deficits — pushed back their expectations for the next Federal Reserve interest-rate cut to mid-2027. While airlines and shipping firms are among those that have suffered the most from the conflict so far, defense and energy stocks have benefited.
A major US attack on the island that exports the bulk of Iran’s crude is raising fears of more widespread supply disruptions in the region, further straining oil and gas markets. As investors brace for wider fallout, attention is turning to previously overlooked pockets of risk — including chipmakers and clothing suppliers — amid concerns ranging from helium shortages to rising raw material costs.
“What began as a contained energy shock is rapidly metastasizing,” said Hebe Chen, senior market analyst at Vantage Global Prime. “The war premium is no longer an energy story — it’s a whole-market repricing, and the secondary victims are only just beginning to surface.”
Here’s a look at some of the sectors under increased investor scrutiny as the broader consequences of the war unfold.
Chipmakers
Semiconductor firms that had been riding the global AI boom are also caught up in the war-induced supply chain disruptions.
Qatar’s closure of a major liquefied natural gas plant after an Iranian drone attack has taken about a third of global helium production offline, Bloomberg Economics estimates. That’s a potential hit to chipmakers since it’s an essential component of production and there’s no ready substitute, according to Bloomberg Intelligence analyst Michael Deng.
Beyond the helium shortage, surging energy prices threaten to dampen demand for semiconductors by driving up the operational costs of AI data centers.
The Philadelphia Stock Exchange Semiconductor Index has shed more than 5 per cent since the conflict started, while Asian chip stocks including Samsung Electronics Co., SK Hynix Inc. and Taiwan Semiconductor Manufacturing Co. have also fallen. Meanwhile, shares of helium manufacturer Linde India Ltd. have risen.
For now, the impact is expected to be contained. The margin impact should be modest, given the structural oversupply of helium in recent years and the multiple helium sourcing arrangement, according to UBS Group AG analysts including Sunny Lin.
TSMC has “around 6 months of safety inventory on hand — so they do not expect it to become an issue in the short term,” said Jefferies analyst William Beavington.
Others, however, are less optimistic.
“Potential disruption to semiconductor supply looks under-appreciated,” said Gary Tan, a fund manager at Allspring Global Investments. “Semiconductor fabs are among the most energy-intensive manufacturing facilities in the world and Taiwan and South Korea are heavily reliant on LNG.”
Food and Stoves
Supply disruptions in the Middle East, where India sources most of its gas, have created acute shortages in its cooking gas market.
As a result, food delivery companies are facing the prospect of slower orders as local restaurants consider shorter operating hours and reducing items on their menus to cope with an acute gas shortage. That has pummeled shares of Eternal Ltd. and Swiggy Ltd. as well as Jubilant Foodworks Ltd., a restaurant operator.
Fears of an extended cooking-gas shortage have boosted shares of manufacturers of electric cook-tops, such as TTK Prestige Ltd. and Stove Kraft Ltd., as consumers look for alternatives to gas.
Meanwhile, US ride-share and food delivery operators like Uber Technologies Inc., DoorDash Inc. and Lyft Inc. are facing their own hurdles. As Bloomberg Intelligence analyst Mandeep Singh pointed out, fuel remains the largest variable cost for drivers, making these companies highly sensitive to oil shocks.
Automakers
Car makers may also suffer as higher oil prices threaten to stifle consumer demand. Bloomberg Intelligence’s Steve Man said that of the main US automakers, Ford Motor Co. is the most vulnerable because of the disproportionate amount of its revenue that comes from gas-guzzling pick-up trucks.
Toyota Motor Corp. and Hyundai Motor Co. may face the most impact from the decrease in Middle East sales, as the region accounts for 17 per cent and 10 per cent of their total sales, respectively, according to Bernstein analysts including Eunice Lee. Hyundai shares have plummeted 23 per cent this month, with Toyota down 12 per cent.
The conflict also casts a shadow over Chinese auto exports, for which the Middle East has become a growing destination. Anhui Jianghuai Automobile Group Corp. may be most impacted with 9 per cent volume exposure, followed by SAIC Motor Corp., Chery Automobile Co., Chongqing Changan Automobile Co. and Great Wall Motor Co., according to Bernstein.
“Given that the Strait of Hormuz is a critical passage for vehicle and parts shipments to the Middle East, a prolonged conflict and closure of the strait would hurt sales, increase logistics costs, and delay deliveries,” Lee said.
Retailers
In the retail sector, the pain is twofold. Rising oil prices drive up distribution costs while simultaneously draining the discretionary spending power of consumers at the pump, according to John Zolidis, president and founder of Quo Vadis Capital.
Shares of US-listed apparel brands and retailers have slid, with Lululemon Athletica Inc., Nike Inc., Macy’s Inc. and RH all seeing double-digit drops this month.
Clothing suppliers in China are also bracing for higher input costs, with chemical fibers such as polyester and acrylic — both oil-derived — widely used in garment manufacturing. Shares of textile materials maker Huafu Fashion Co. and downstream apparel maker Youngor Fashion Co. have been volatile as investors weighed the potential margin impact.
Fertilisers
As much as 35 per cent of global fertilizer raw materials pass through the Strait of Hormuz, according to Morningstar DBRS analyst Andrea Petroczi-Urban. This bottleneck is expected to drive North American fertilizer prices higher as global demand intensifies.
In anticipation of tightened supply, producers like Nutrien Ltd. and The Mosaic Co. have seen their stock prices climb.
The outlook is more somber across the Asia-Pacific region, which relies heavily on Middle Eastern imports. Morgan Stanley economists note that Australia is particularly exposed. The country’s main fertilizer stock Dyno Nobel Ltd. has fallen over 9 per cent this month, while Nufarm Ltd.’s shares have declined 4 per cent.
In India, officials have asked China to allow the sale of some urea cargoes as the war curtails the nation’s gas supplies, threatening fertilizer production in the agricultural powerhouse. Stocks including Rashtriya Chemicals & Fertilizers Ltd. have dropped.
Chemicals
Around 15 per cent of global ethylene and polyethylene supply is directly impacted by the conflict, according to KeyBanc Capital Markets analyst Aleksey Yefremov. As global supplies tighten, demand for US chemicals is rising and firms like Dow Inc. and LyondellBasell Industries NV are expected to see their margins benefit.
Similarly, Chinese chemical stocks such as Hebei Jinniu Chemical Industry Co., have jumped about 80 per cent since the war began, as a string of industry players announced steep price hikes.
The closure of the Strait of Hormuz has disrupted the production of ethylene. As a result, ethylene prices are surging — impacting industries that rely on it, from plastics and detergents to polyester and paint. Cosmetics-tied stocks in Europe like L’Oreal SA and LVMH will likely be in focus due to their heavy reliance on plastic.
The pain extends to the paint industry, where raw materials are largely oil-derived. ICICI Securities estimates that if oil stabilizes at $100 per barrel, firms like Asian Paints Ltd. would need to hike prices by a staggering 22 per cent just to protect their margins.
Alternative energy
Alternative energy plays — from wind and solar to lithium batteries and energy storage systems — are drawing renewed interest, as the deepening oil crisis fuels demand. Shares of wind-turbine maker Goldwind Science & Technology Co. have gained about 10 per cent this month and those of battery giant Contemporary Amperex Technology Co. have risen 16 per cent.
Homebuilders
US homebuilder stocks have come under pressure as expectations for rate cuts fade, which could push mortgage rates higher.
The key question is whether these impacts will be long term, according to Truist Securities analyst Keith Hughes. For example, a higher 10-year yield results in higher mortgage rates and “could negatively impact home buying and consumer confidence,” the analyst wrote in a note.
Rising interest rates could hurt construction-focused companies such as TopBuild Corp. and Builders FirstSource, Inc., while higher crude and natural gas prices may raise costs for firms like Mohawk Industries, Inc. and Amrize Ltd.
Sugar and Tires
Indian sugar firms including Balrampur Chini Mills Ltd. and Shree Renuka Sugars Ltd. are potential beneficiaries on the expectation that surging oil prices will lift rates for ethanol supplied by mills for blending with state-run firms’ fuel.
Meanwhile, tire manufacturers use crude by-products for synthetic rubber and reinforcement fillers. And higher oil prices have seen stocks including Apollo Tyres Ltd. and MRF Ltd. come under pressure.
Metals
On top of the impact on energy supply, smelters in the Middle East see incoming raw materials and outbound sales of metals disrupted. The Persian Gulf is home to about 9 per cent of global aluminum output, with prices for the metal hitting a four-year high before paring gains.
European giant Norsk Hydro ASA finds itself at the center of this storm through its 50 per cent stake in the Qatalum joint venture. After a controlled shutdown was initiated on March 3 due to the regional natural gas shortage, the stock saw a volatile recovery following news that Qatar Aluminum Ltd. no longer plans a total closure.
The fallout from any closure will likely be felt even after the immediate risk of attacks fades because aluminum smelters take three to six months to fully ramp up again, Citigroup Inc. analyst Ephrem Ravi wrote in a note.
Meanwhile, US aluminum firms like Alcoa Corp. have seen stock price gains as its smelting operations see limited disruption and its earnings stand to benefit from elevated metal prices.
