Economy and Markets Likely to Prove Resilient

by Russ Koesterich of BlackRock, 4/22/26

Key takeaways

  • While Russ acknowledges that the ongoing conflict in the Middle East has contributed near-term volatility, he also notes that these rising tensions are occurring against the backdrop of a solid U.S. economy.
  • As tensions escalate overseas, it’s important to note that U.S. consumers are less sensitive to gasoline prices than they were 40 years ago and, as a country, the U.S. has shifted from a net importer of crude to a net exporter.
  • Although both the intensity and length of the conflict remain uncertain, Russ maintains a baseline assumption of economic resilience, rather than recession or a bear market.

Stock markets, at least in the U.S., were already facing several challenges: an abrupt rotation out of technology, lingering inflation concerns and unresolved tariff uncertainty. Now add to the list a new war in the Middle East and an oil shock.

While the length and the extent of the conflict will determine the magnitude and duration of the oil shock, along with market volatility, there are four reasons to be optimistic: a so far manageable rise in the price of oil, shifts in U.S. spending, rising domestic production and economic momentum.

Read more: Innovation Insights Quarterly: Q2 2026

Going into the war, oil was well supplied. The average price of the U.S. benchmark West Texas Intermediate (WTI) was around $60/barrel in early January. While oil has risen significantly, it remains well below the levels reached in previous oil shocks, particularly when you adjust for inflation (see Chart 1).