Like me, I’m sure most of my readers and clients followed the news coming out of the Middle East and especially, Israel, this past weekend.

When markets reopened Monday morning, Saturday’s strike by Hamas and Israel’s subsequent declaration of war brought risk to unnerving markets. Investors are keeping a close eye on oil prices—although crude traders are not anticipating an outsized surge.

The Days to Come

The fallout in markets will likely be determined by whether the conflict spreads. Iran is both a major oil producer and supporter of Hamas.

But I don’t believe this Hamas conflict will greatly affect medium and long-term markets, perhaps not even short-term.

Like I indicated above, a knee-jerk reaction will be for oil to spike up a little bit. The bottom line is markets don’t like uncertainty, and this just plays into the deck of cards we’re dealing with right now, which is a lot of uncertainty.

There’s a small chance that this conflict—by way of adding to that uncertainty along with the facts of war in the Middle East, the consumption of goods and services here—could increase the likelihood of a recession and consumer behavior.

How Will This Impact US Markets

I see this is much less of a concern than that of Treasury yields nearing 5%, which does not bode well for equity markets. In the end, we need more buyers of stocks than sellers.

When uncertainty is high, you typically have more sellers. Not terribly scientific, but there are high starts around 10-year treasury yields being above 4.8%, and the effect that this has on equity buyers/equity markets.

Leading investors, economists, traders, and market strategists have different responses to this time in history. Most feel that it is too early to say what the long-term effects will be, but most do agree that for now there will not be a huge impact on European or US markets.

While local stock markets are reacting, I don’t expect the same impact over the next couple of days. The only asset class one can look to for a possible reaction is oil, which I covered above.

Stay in touch for more updates. Need to know more: Grab a 15-minute time slot with me to discuss risk and allocation as we go forward through this week and month!