Apollo’s Marc Rowan highlights growing geopolitical tensions as a key driver of market volatility, citing rising oil prices and increased defense spending. His comments come as energy and defense sectors show strong performance amid global uncertainty.
- Crude oil (CL=F) rose to $94.80/bbl, up 14% in one month
- U.S. defense spending projected at $915 billion in 2026
- Defense sector valuations up 22% year-to-date
- CBOE Volatility Index (^VIX) at 28.3, highest since late 2023
- Apple (AAPL) stock dropped 6% due to supply chain disruptions
- Geopolitical risk is now a core factor in asset allocation decisions
Apollo co-founder Marc Rowan has issued a stark warning about the accelerating impact of geopolitical instability on global financial markets. Speaking in a recent investor briefing, Rowan emphasized that unresolved regional conflicts and shifting alliances are now central to asset pricing, particularly in energy and defense. He noted that such risks are no longer peripheral but are actively shaping investment strategies across major asset classes. The energy sector has seen pronounced volatility, with crude oil futures (CL=F) surging to $94.80 per barrel—up 14% over the past month—driven by supply concerns from the Middle East and tensions in the Red Sea. Rowan pointed to a 22% increase in defense sector valuations year-to-date, with companies like Raytheon Technologies and Lockheed Martin seeing significant inflows. He also observed that U.S. defense spending is projected to reach $915 billion in 2026, up from $870 billion in 2024, signaling sustained market tailwinds for defense contractors. Volatility metrics reflect the growing unease. The CBOE Volatility Index (^VIX) climbed to 28.3, its highest level since late 2023, indicating heightened fear in equity markets. Meanwhile, technology giant Apple (AAPL) reported a 6% dip in its stock price following a supply chain disruption in Southeast Asia linked to regional instability, underscoring the global reach of geopolitical shocks. Investors are responding with defensive positioning, increasing allocations to commodities, long-duration bonds, and defense equities. Rowan advised clients to maintain diversified portfolios with explicit exposure to geopolitical risk hedging tools, including options on energy futures and geopolitical risk indices.