Business leaders and analysts are sounding the alarm about declining business sentiment as President Donald Trump threatens to escalate the Iran war on Tuesday.
Trump gave the Iranian regime until 8:00 p.m. EDT Tuesday to open the Strait of Hormuz, a vital international shipping route, or the U.S. will bomb Iranian infrastructure such as power plants and bridges. Business surveys and comments from industry leaders such as JP Morgan Chase CEO Jamie Dimon paint a bleak picture of how market participants are feeling about the prospects of the economy as the Iran war continues. (RELATED: Trump Warns ‘A Whole Civilization Will Die’ If Iran Does Not Make Deal With US)
“The challenges we all face are significant. The list is long but at the top are the terrible ongoing war and violence in Ukraine, the current war in Iran and the broader hostilities in the Middle East, terrorist activity and growing geopolitical tensions, importantly with China,” Dimon wrote in a letter to shareholders Monday.
Rising oil prices caused by the war-induced slowdown in shipping through the Strait of Hormuz weighed heavily on market respondents in the Institute for Supply Management’s (ISM) monthly service sector index. Prices in the ISM index registered their highest reading since October 2022, and the supplier deliveries index was lower compared to February due to rising fuel prices and shipping disruptions caused by the conflict.
“The U.S.-Israel military operations against Iran have created significant uncertainty for our Omani frankincense imports. Threats to close the Strait of Hormuz and rising war-risk surcharges are pressuring regional logistics costs, even for air freight,” a wholesale trader responded in the monthly survey.
Market analysts, such as Moody’s Analytics chief economist Mark Zandi, also warned that business sentiment was declining in a note on his firm’s website on Monday. “Global business sentiment is volatile week to week, but it has meaningfully weakened since the conflict with Iran began over a month ago. Higher energy prices, interest rates, and lower stock prices are weighing on confidence,” Zandi wrote.
Consumers were also experiencing pain due to higher costs and uncertainty as a result of the ongoing conflict in the Middle East. The University of Michigan Consumer Sentiment Index registered a 6% decline in March, with declines seen across all ages and political parties.
The war’s effects have spilled over into the U.S. housing market as well, with real estate agents reporting that consumers were concerned with the economy and rising mortgage rates, according to CNBC. Mortgage rates hit a low of 5.99% the day before the conflict began, but now hover around 6.5%, CNBC reported.
Increasing jet fuel costs have forced airlines to scramble to cover the rising prices, with Delta announcing Tuesday that the airline would increase prices on checked bags for passengers beginning Wednesday. Delta’s competitors, Jet Blue and United Airlines, previously announced similar fee increases on checked bags to cover rising fuel costs.
As the price of an average gallon of gas reached $4.14 in the U.S. on Tuesday, Goldman Sachs was warning that some Southeast Asian countries could run out of oil completely, while the U.S. could lose 60% of its fuel oil capacity.
A navy vessel is seen sailing in the Strait of Hormuz, a vital waterway through which much of the world’s oil and gas passes on March 1, 2026. (Photo by Sahar AL ATTAR / AFP via Getty Images)
However, despite the dour business sentiment, there were some positive signs for the economy, with a stronger-than-expected jobs report released on Friday by the Bureau of Labor Statistics showing that employers added 178,000 jobs and the unemployment rate ticked down to 4.3%. “Despite the unsettling landscape, the U.S. economy continues to be resilient, with consumers still earning and spending (though with some recent weakening) and businesses still healthy,” Dimon also noted in his letter to shareholders.
“Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!!” Trump posted on Easter Sunday. “Open the Fuckin’ Strait, you crazy bastards, or you’ll be living in Hell – JUST WATCH! Praise be to Allah.”
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