Good morning. Just as companies were adjusting to tariffs, the Iran conflict has delivered a fresh energy shock, potentially reviving inflation risks and squeezing margins.
On Sunday evening, as investors reacted to the U.S.–Israeli bombardment of Iran, U.S. stock futures pointed to a risk-off trade. The selloff followed President Donald Trump’s warning that more casualties are likely from Operation Epic Fury. Futures tied to the Dow Jones Industrial Average fell 353 points, or 0.72%. S&P 500 futures were down 0.68%, and Nasdaq futures lost 0.79%, Fortune’s Jason Ma and Amanda Gerut reported.
Oil moved even faster. U.S. crude jumped 5.6% to $70.77 a barrel, while Brent gained 5.9% to $77.15 after earlier spiking more than 8%.
For corporate leaders, the issue is not just the immediate market reaction. It is the layering of shocks. Tariffs were already raising costs and complicating planning assumptions. Now an energy supply scare adds a second channel of pressure, through fuel, freight, and input prices, just as inflation appeared to be stabilizing.
Policy uncertainty compounds the problem. The Supreme Court struck down one set of Trump-era tariffs, but analysts expect the administration to reroute them through other statutes, keeping trade policy unpredictable and forcing companies to model multiple tariff paths.
Finance teams are left planning for several scenarios at once. And war risk in the Gulf makes any reconfigured supply chains potentially more fragile.
McKinsey’s recent survey of 100 companies underscores how exposed corporate supply chains remain. Eighty-two percent of respondents said tariffs are affecting their operations, with 20% to 40% of supply chain activity impacted. Thirty-nine percent reported higher supplier and material costs, while 30% saw weaker customer demand. Supply chains with a U.S. connection were most vulnerable, with 70% of respondents saying tariff impacts on U.S. demand were greater than or equal to effects elsewhere.
For CFOs, agility has become standard operating procedure. But the compounding nature of trade friction and geopolitical risk is forcing a deeper shift—from short-term adjustments to structural resilience that encompasses both people and policies.
Sheryl Estrada
sheryl.estrada@fortune.com
