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War Uncertainty Poses Greater Challenge Than Economic Downturns, Expert Says

Apr 01, 2026 21:46 UTC
^VIX, XLF, XLE
Medium term

Rebecca Homkes, a lecturer at the London Business School, argues that the unpredictability of war-related economic impacts is more difficult for executives to navigate than traditional downturns. The ongoing conflict with Iran has heightened market volatility.

  • Rebecca Homkes discusses the challenges of economic uncertainty caused by war.
  • The ongoing conflict with Iran is creating a more volatile environment than traditional downturns.
  • Executives struggle with unpredictable outcomes in war scenarios.
  • Defense and energy sectors are particularly affected by geopolitical tensions.
  • Market indicators like the VIX and ETFs XLF and XLE show investor concerns.

Rebecca Homkes, a faculty member at the London Business School and Duke Corporate Executive Education, highlighted the complexities of managing business strategies amid the uncertainty of prolonged conflict. In a recent discussion, Homkes emphasized that the ongoing war with Iran has created a volatile economic environment, making it harder for executives to anticipate outcomes compared to more predictable downturns. Unlike standard economic contractions, where historical patterns can guide decision-making, the unpredictable nature of war-related disruptions complicates strategic planning. Homkes noted that the duration of the Iran conflict remains uncertain, with the potential to end at any time, adding to the challenge for business leaders. The defense and energy sectors, in particular, face heightened risks as geopolitical tensions persist. Market indicators such as the VIX volatility index and sector-specific ETFs like XLF (financials) and XLE (energy) reflect the growing anxiety among investors.

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