The global financial landscape is undergoing a violent recalibration as military strikes between the US, Israel, and Iran send shockwaves through international markets.
With the Strait of Hormuz facing a de facto blockade and oil prices surging toward the $100 mark, investors are frantically unwinding “rest of the world” trades that had gained momentum in early 2026.
In this climate of extreme volatility, Citi’s senior equity strategist Scott Chronert suggests the US is emerging not just as a survivor – but as a definitive “safe haven” for capital seeking shelter from the storm.
Geopolitical turmoil drives a return to US stocks
As the conflict escalates, the massive flow of capital into “international markets” seen over the last month is reversing at a record pace.
According to Chronert, the recent “rush to broaden one’s exposure away from US growth cohort” was a logical move when markets were betting on AI disruption; however, the Iran war has shifted the calculus.
“US actually comes through as a bit of a safe haven as we continue to go through the tumultuous events there,” the Citi analyst told CNBC.
Why? Because the US offers structural stability its global peers lack. War introduces energy impact and supply chain disruptions that hit Europe and Asia much harder than America.
While the “rest of the world looked better” in a peaceful expansionary phrase, the current “conflict route” makes US stocks a defensive necessity for those fleeting the direct energy impacts.
US stocks benefit from energy independence advantage
Iran war has fractured global logistics networks and maritime insurance costs have jumped – but the US domestic economy remains uniquely insulated due to its structural energy position.
As Chronert put it: “US is in a little bit better position, something closer to energy independent.”
This self-sufficiency provides a critical buffer against “stubborn” oil prices that threaten to hollow out corporate margins in energy-dependent regions.
In fact, Chronert still sees the US position as “net margin additive” – provided the duration of the conflict doesn’t trigger a total global collapse in demand or an unmanageable inflationary spike.
AI remains the ultimate long-term deflationary shield
Despite the immediate terror of war-induced inflation, Chronert argues that the underlying tech revolution remains the most potent economic force on the horizon.
While “inflation concerns are real in the short-term,” the AI productivity disruption that dominated headlines before the war began is still viewed as a “limiting factor” for rising costs.
Looking past the immediate smoke of the Middle East, the Citi analyst asserts “deflation risk is probably a bigger concern as we go forward a year or two from now, with AI buildout continuing.”
For investors, this means US stocks remain the premier destination because they have both: energy security to survive the present and AI infrastructure to dominate the post-war recovery.
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