Allocators are acknowledging over a month into the war in Iran that if a deal to reopen the Strait of Hormuz isn’t on the table soon, that there may be serious long-term ramifications on the global economy. According to Conning’s North America CIO Cindy Beaulieu, the economic and market outlook depends on whether the conflict de-escalates — at least to some degree — or escalates into a wider war with ground troops. Until then, extreme uncertainty is preventing any sustained rally in equities.

“These next few weeks feel like we’re getting to a tipping point,” Beaulieu told Institutional Investor. “What things look like in the couple of weeks will matter a lot.”

Beaulieu believes the best-case scenario is that an agreement is made to stop daily conflict, leading gas prices to slowly retreat. The worst case: The U.S. and its allies bring in ground troops, driving up oil prices, causing consumers to struggle, and economies around the globe to lack fuel supplies. 

“We’re not there yet, but it feels like it’ll go one way or another in a few weeks,” she added. 

While equity markets will be informed by the war itself, Beaulieu is focused on earnings and whether companies downgrade their expectations. 

“I think these next couple of weeks will look like the last four,” she said, where markets will be impacted daily by what’s changed overnight, what’s been posted online about the strategy, and how the impacted regions are reacting. “All those things will factor into trading every day: How far is the off-ramp? Is there one?”

While Beaulieu remains optimistic about the U.S. economy’s potential for growth thanks to decent capex spending and provisions within the One Big Beautiful Bill Act — the team is now considering the long-term impacts of this war. 

“We haven’t made a change [to our base case] yet, but we’re starting to think about what that could look like,” Beaulieu said, adding that it being a midterm election year puts pressure on President Trump to work toward a solution. She noted that even the best-case scenario will still have bombs dropping for months after any deal is made to reopen the Strait of Hormuz (not to mention continued proxy wars occurring in the surrounding region).

“The need for clarity — for certainty — is called upon for every market, and we just don’t have that right now,” she added.