Emerging-market stocks rise amid war

Emerging-market equities are advancing even as the Iran war continues to influence global risk sentiment. Recent performance data point to a broad-based rally across developing markets, with investors showing renewed appetite for these assets despite persistent geopolitical uncertainty.

Market observers note that the conflict has become a central factor in shaping trading conditions, yet it has not derailed the upswing in emerging-market stocks. Instead, equity benchmarks tied to these economies have moved higher, underscoring their resilience in the face of ongoing tensions.

The iShares MSCI Emerging Markets ETF (EEM), a widely followed gauge of developing-world equities, has posted a notable advance in 2026. The fund increased by 17.2% from $54.71 on January 1, 2026, to $64.13 as of May 2, 2026.

This price move highlights the strength of the current rally and positions EEM as a key vehicle through which investors are expressing constructive views on emerging markets. The performance has come against a backdrop of conflict, suggesting that many market participants continue to seek growth opportunities in these regions.

The gains in EEM also reflect a broader market surge in emerging equities, as capital flows respond to changing expectations for global growth, commodity prices, and geopolitical risk. The ETF’s advance has become a reference point for sentiment toward developing economies.

Projections that U.S. oil prices could exceed $125 as the Iran war continues are playing a significant role in market dynamics. Higher expected energy prices are feeding into assessments of trade balances, inflation, and fiscal conditions across emerging economies.

These oil forecasts are influencing investor sentiment toward emerging-market assets. For some energy-exporting countries, the prospect of elevated crude prices may support revenue and growth expectations, while also shaping how global investors allocate portfolios across regions and sectors.

The interaction between rising oil projections and the ongoing conflict has become a key backdrop for trading decisions. As investors weigh risks and opportunities, the combination of higher expected energy prices and robust equity performance is contributing to an overall bullish outlook for emerging-market stocks.

Despite the uncertainties associated with the Iran war, emerging-market equities have demonstrated notable resilience. The continuing rally, as reflected in the performance of EEM and other benchmarks, suggests that investors remain focused on the growth prospects and diversification benefits these markets can provide.

The ability of emerging-market stocks to climb in such an environment underscores how geopolitical events, commodity price expectations, and investor risk appetite are currently aligning. For now, the prevailing trend points to sustained interest in developing-world equities amid a complex global backdrop.