Banks

The International Monetary Fund has downgraded its global growth forecast for 2026 from 3.3 to 3.1 percent, citing the impact of the United States-Israeli war on Iran and the shutdown of the Strait of Hormuz on the world economy.

The war has damaged energy infrastructure across the Gulf, while critical exports like oil, gas, chemicals and fertiliser remain largely stranded by Iran’s shutdown of the strait and the subsequent US naval blockade of Iranian ports.

In the worst-case scenario of a prolonged war, the IMF said global growth could fall to 2.5 percent in 2026, with low-income and developing economies hit the hardest by soaring commodity and energy prices. The global shipping and logistics industry is facing a separate crisis.

But every economic crisis also has beneficiaries: despite the dire macroeconomic outlook, some corners of the global economy are thriving on the uncertainty.

Here’s a look at five industries that are doing well either despite – or because of – the darkening economic outlook.

Wall Street investment banks

Global investors have been on a rollercoaster since the start of US President Donald Trump’s second term last year. The president’s erratic decision-making, where he often issues an ultimatum one day and then changes it the next, has led traders to coin the term “TACO trade”, where TACO stands for “Trump Always Chickens Out”.

The recent volatility has made some investors anxious, but it’s been a boon to investment banks, which make millions in commissions and revenue from the surging volume of trade, according to Sean Dunlap, a director of equity research at Morningstar Research Services.

“Clients want to reposition, so they trade frequently,” he told Al Jazeera. “Spreads tend to increase, which increases the profitability for trade intermediaries like banks.”

First-quarter results for 2026 – released this week – showed that Morgan Stanley reported a profit of $5.57bn, up 29 percent year on year, while Goldman Sachs reported a profit of $5.63bn, up 19 percent year on year.

JP Morgan Chase also reported major gains, with first-quarter earnings of $16.49bn, up 13 percent year on year. The banks all cited high levels of trading, deal-making, and “robust client engagement” as the reasons behind surging profits.

The boomtime for banks could reverse course, however, if volatility persists for too long, Dunlap warned, because investors may become increasingly cautious and less willing to borrow money to make trades.

Prediction markets

As mainstream Wall Street banks reap profits, the crypto-based prediction platform Polymarket has been earning upwards of $1m a day since the start of the month by letting users make peer-to-peer bets on everything from sports tournaments to elections.

Polymarket has been doing well since the start of the war, but it revised its fee structure on March 30 to cash in even more on its popularity.

Rival platforms like Kalshi, Novig and Robinhood also follow the same business model, but Polymarket has been the standout winner of 2026 because it controversially allows users to bet on the outcome of conflicts like the Iran war.

Polymarket revised its fee structure on March 30 to cash in on its popularity. The change has already netted the platform more than $21m in fees since April 1, up from $11.6m for all of March and $6.23m for all of February, according to DefiLlama, a website that provides data analysis for decentralised finance platforms.

If the current trend continues, Polymarket could make $342m in fees this year alone, according to DefiLlama’s analysis.

Anonymous users have also made millions correctly predicting the dates of major events like the US-Iran ceasefire, but the outcomes for rank-and-file users are typically less impressive.

Researchers found that the top 1 percent of Polymarket users captured 84 percent of all trading gains, according to a new report released this month analysing 70 million trades from 2022 to 2025. The returns are so high that US federal regulators have pledged to crack down on insider trading in prediction markets following suspiciously well-timed bets on Iran war outcomes.

Aerospace and defence

Unsurprisingly, the aerospace and defence industries are booming this year due to major conflicts in Ukraine, Iran, Sudan, Gaza and Lebanon and a surge in global defence spending.

About half of the world’s countries have increased their military budgets over the past five years, according to an April report from the IMF, which means they are also buying everything from drones to missiles — more than ever before. Demand is growing particularly fast in Europe, where NATO countries have committed to raising defence spending to 5 percent of gross domestic product (GDP) by 2035.

The defence industry has, in turn, seen major gains on the stock market. The MSCI World Aerospace and Defence Index – which tracks aerospace and defence stocks across 23 global markets – reported net returns of 32 percent year on year at the end of March.

The defence index outpaced the MSCI World Index, which tracks 1,300 large and mid-cap companies across the same 23 markets. The index, which gives a broader overview of global stock markets, reported net returns of 18.9 percent over the same period.

Artificial intelligence

Last year, the United Nations Trade and Development (UNCTAD) office predicted that the AI industry would grow from $189bn in 2023 to $4.8 trillion by 2033, and the Iran war does not seem to have dented the outlook.

“Despite the shocks from the Iran war, we’re still seeing resilience in a lot of sectors like artificial intelligence and renewable energy,” said Nick Marro, lead analyst for global trade at the Economist Intelligence Unit.

One metric for the AI boom has been the high volume of semiconductor chips still being exported out of East Asia, he said. At the top of the chart is chipmaking powerhouse Taiwan, which reported record-breaking merchandise exports of $80.2bn in March, up 61.8 percent year on year, according to EIU analysis.

The surge was led by exports to the US, which grew by 124 percent year on year, the EIU said.

Taiwan Semiconductor Manufacturing Company, the world’s top chipmaker better known by its acronym “TSMC,” on Thursday posted a net income of 572.8 billion New Taiwan Dollars (NTD) ($18.1bn) for the first three months of 2026 – up 58 percent year on year in NTD.

Another metric, initial public offerings or “IPOs,” also shows that the industry is confident for the moment, with industry leaders Anthropic and OpenAI both planning to go public this year.

Renewable energy

The Iran war has highlighted the need to transition from fossil fuels not only for environmental reasons, but also for reasons of energy security. The war marks the third major energy shock this decade, following the COVID-19 pandemic and the 2022 Russian invasion of Ukraine.

The Iran war has “boosted” renewable energy “given the urgency to switch away from fossil fuels and diversify towards renewable sources,” Marro of the EIU said.

Even before the Iran war began, the International Energy Agency reported that global governments were already taking active measures to invest in renewable energy for geopolitical reasons.

According to an IEA report released this month, “150 countries have active policies to advance renewable and nuclear deployment, 130 have energy efficiency and electrification policies, and 32 have policies to incentivise supply chain resilience and diversification across critical minerals and clean energy technologies.”

The Iran war has triggered another flurry of policymaking in Asia, which typically buys 80 to 90 percent of the oil and gas that transits through the Strait of Hormuz. Since the shutdown, the region has been struggling to find alternative sources of energy, forcing governments to deploy emergency measures like fuel rationing and price caps.

South Korea, Thailand, India, Cambodia, Indonesia, Vietnam and the Philippines have all announced a variety of measures from tax breaks for at-home solar panels to commissioning new renewable energy projects – and even restarting nuclear reactors.

The surge in policymaking has been good for the renewable industry. The S&P Global Clean Energy Transition Index, which tracks 100 companies that produce solar, wind, hydro, biomass and other renewable energy across emerging and developed markets, is up 70.92 percent year on year.

WASHINGTON — If the U.S. and Iran aren’t able to soon come to a deal to end the war or extend the ceasefire that expires next week, the Trump administration is setting the stage to shift its war campaign toward a more economic-focused effort aimed at choking Tehran into submission rather than relying on bombs alone.

Treasury Secretary Scott Bessent told reporters at a White House briefing Wednesday that the U.S. plans to ramp up economic pain on Iran, and said the new moves will be the “financial equivalent” of a bombing campaign.

The threat of secondary economic sanctions on countries doing business with people, firms, and ships under Iranian control — including allies like the United Arab Emirates and competitors like China — represents an escalation of sanctions that the U.S. is already employing.

Bessent said the administration has “told companies, we have told countries that if you are buying Iranian oil, that if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions, which is a very stern measure. And the Iranians should know that this is going to be the financial equivalent of what we saw in the kinetic activities.”

Treasury Department warns China, Hong Kong, the UAE and Oman

The warning comes the day after the Treasury Department sent a letter to financial institutions in China, Hong Kong, the UAE, and Oman, threatening to levy secondary sanctions for doing business with Iran, and accusing those countries of allowing Iranian illicit activities to flow through their financial institutions.

It’s part of an economic playbook that President Trump still can use to pressure Iran to accept U.S. proposals to limit its nuclear ambitions, a person familiar with the administration’s thinking told the Associated Press. The person spoke on the condition of anonymity because they were not authorized to discuss private discussions on the record.

Privately, the argument being made to Trump is that the Iranians think they can weather the storm — but if they cannot pay their loyalists, that could pressure Iran to the table.

And some in the administration believe there are still more economic targets that can be hit that would put the economic hurt on Iran, including bonyads, the charitable trusts that account for a significant percentage of the Iranian economy.

Bessent told reporters that two Chinese banks have received warnings about handling Iranian money. Trump is preparing to visit Beijing next month for talks with Chinese President Xi Jinping.

Bessent also said that Iran’s Gulf neighbors are now willing to look at freezing Iranian money in their banks because of Iran’s aggression during the war.

Daniel Pickard, a sanctions attorney, said imposing secondary sanctions could result in “diplomatic and economic blowback” from allies that could hurt efforts to build coalitions against Tehran.

“A lot of our trading partners have been outspoken in regard to their opposition to the conflict in Iran,” Pickard said. “Most economic sanctions professionals would agree that when you get more people on the team, the chances of your economic sanctions being effective are greater.”

On Wednesday, the U.S. imposed sanctions on an oil smuggling network connected to the deceased senior Iranian security official Ali Shamkhani, who was a close advisor to the former Supreme Leader of Iran. Sanctions include dozens of individuals, companies, and vessels involved in secretly transporting and selling Iranian and Russian oil through front companies, many of which are in the UAE.

“Treasury will continue to cut off Iran’s illicit smuggling and terror proxy networks,” Bessent said in a statement. “Financial institutions should be on notice that Treasury will leverage all tools and authorities, including secondary sanctions, against those that continue to support Tehran’s terrorist activities.

The administration believes the momentum has shifted

Trump administration officials have also signaled growing confidence that the ceasefire and a blockade of shipments from Iranian ports in the Strait of Hormuz have shifted momentum in Trump’s favor.

Iran has endured tens of billions of dollars in damage during the bombardment to the country’s infrastructure — including setbacks to its oil industry, the heart of its fragile and long-isolated economy — that could take years to repair.

Vice President JD Vance on Tuesday said Trump “doesn’t want to make, like, a small deal. He wants to make the grand bargain.”

“That’s the trade that he’s offering,” Vance said. “If you guys commit to not having a nuclear weapon, we are going to make Iran thrive.”

The president’s deputy chief of staff, Stephen Miller, offered a more caustic assessment of the moment, suggesting that Trump had “played the checkmate move” on Iran by implementing the blockage in the strait.

“If Iran chooses the path of a deal that’s great for the world, that’s great for everybody. If Iran chooses the path of economic strangulation by blockade, then the world will pass Iran by,” Miller said in a Fox News appearance Tuesday evening. “New energy routes will be established. New supply chains will be established. Other nations throughout the region — throughout the world, and especially America — will power the world and Iran will become a footnote.”

Some Republicans are skeptical that more sanctions will work

Some Republicans believe that any tactic to exert more pressure on Tehran is worth trying.

“I would support anything,” said Sen. Thom Tillis (R-N.C.). “If the administration came up with the ideas, I would support all of the above. More pressure, the better.”

Others were skeptical, noting that Tehran was already facing a litany of economic penalties that had little impact on its behavior.

“I’m not sure if it’s sanctions that’ll do it. I think we’re putting some pretty heavy sanctions on right now,” said Sen. Mike Rounds (R-S.D.), a member of the Banking and Armed Services Committees. “I personally am just not optimistic that we actually can fix this thing without a regime change.”

Trita Parsi, executive vice president of the Quincy Institute, a think tank that has been critical of Trump’s decision to launch the war, says that Trump had been “politically cornered and strategically constrained” before he announced the ceasefire. But now, Parsi argues, Trump may have altered the difficult dynamic and created a situation where “Iran now appears to need an agreement more than the United States does.”

“The window now open offers Tehran a chance to convert battlefield leverage into lasting strategic gain,” Parsi wrote in a new analysis. “To let it close would mean forfeiting not just incremental progress, but the possibility of reshaping its economic and geopolitical position. By contrast, the United States, having already secured a tenuous exit ramp through the ceasefire, has less at stake in the short term.”

Hussein, Madhani, Weissert and Kim write for the Associated Press.

Srinagar, Indian-administered Kashmir — The gold earrings were a gift from her father on her birthday just months earlier. But on March 21, as South Asia marked Eid‑ul‑Fitr, Masrat Mukhtar handed them over to an aid collection effort to help civilians in Iran trying to survive the US-Israel war on the country.

She was one of many in Indian-administered Kashmir who paused their customary rituals and celebrations on the auspicious day to contribute cash, household items, and personal assets for a people more than 1,000 miles away.

Her cousins followed, each bringing items of personal value. Families offered copper utensils, livestock, bicycles, and portions of savings. Children broke their piggy banks, sharing savings they had carefully collected over several years. Shopkeepers and traders handed over parts of their earnings.

“We give what we love. This brings us closer to them,” said Mukhtar, a 55-year-old woman from Budgam in the central part of Indian-administered Kashmir, before referring to a name by which the region has historically also been known. “This is what Little Iran does for its namesake. The bond persists through time and conflict.”

That bond, rooted in more than six centuries of historical connections, has taken on a much more overt presence during the war – drawing recognition from Iranian authorities, and concerns over some fund collection methods from Indian officials.

One daughter’s wealth, to another daughter

In Zadibal, a Shia-majority area of Srinagar – the biggest city in Indian-administered Kashmir – 73-year-old Tahera Jan watched neighbours contribute copper pots.

“Kashmiris traditionally collect these utensils for their daughters’ weddings. We chose to give them instead to daughters who lost mothers and sisters in the attacks,” Jan said.

Sadakat Ali Mir, a 24-year-old mini-truck driver, contributed one of the two vehicles he drives for his livelihood. Other contributors offered bicycles, scooters, and other essential items. Children, including nine-year-old Zainab Jan, handed over piggy banks.

To be sure, that Shia constitute between 10 to 15 percent of Indian-administered Kashmir’s population is a factor in why the war in Iran resonates so deeply in the region. But donations for Iran have extended well beyond Shia. Several Sunni families observed simpler Eid meals, redirecting household resources towards Iranian relief. Some shopkeepers closed early, while families adjusted daily routines to contribute.

Political and religious figures also participated. Budgam lawmaker Aga Syed Muntazir Mehdi donated a month’s salary to the relief effort. Imran Reza Ansari, a Shia scholar and leader of the People’s Conference party, noted public participation across communities.

Similar donation campaigns in support of Iranians have also been reported from Pakistan, Iraq and other countries.

But at the heart of this outpouring of support for Iran in Indian-administered Kashmir – which also witnessed large rallies after the killing of Iranian Supreme Leader Ayatollah Ali Khamenei on February 28 – are rare cultural ties that Kashmir and what was then Persia have shared for centuries.

‘Little Iran’

Sufi scholar Mir Sayyid Ali Hamadani arrived in Kashmir from Hamadan in Iran in the 14th century, introducing religious practices, art forms, and Persian literary traditions. Persian architectural influences appear in historical mosques, and the Persian language has shaped local literature.

Irshad Ahmad, a scholar of Central Asian studies, said donation drives drew on this historical reservoir, with prayers, rituals, and art forms reflecting longstanding ties. Kashmir has historically been referred to as Iran-e-Sagheer, or Little Iran.

The donations carry personal and cultural meaning beyond financial value, said experts. “People are not only parting with objects; they are sharing emotional continuity,” Sakina Hassan, a lecturer on humanitarian practices in New Delhi, said.

More than 2,000 people have been killed in Iran during the war, which is on pause at the moment amid a fragile ceasefire brokered by Pakistan. The first round of direct talks between the United States and Iran in Islamabad last week broke down without a deal, and mediators are working on pushing the two sides towards new talks. The ceasefire is set to expire next Wednesday.

Millions in donations

The scope of donations from Kashmir is significant. Estimates from local authorities place the value of contributions at up to six billion rupees ($64m), including cash, gold, jewellery, household items, livestock, and vehicles.

Collection points in Srinagar, Budgam, Baramulla – another major city – and the region’s northern districts were staffed by volunteers documenting donations.

Small contributions, including coins, piggy banks, and utensils, make up a large portion of total aid in terms of volume. Syed Asifi, a volunteer managing central Srinagar collections, said even individuals with limited means brought what they could.

Medical kits were assembled by local doctors, and supply drives were organised by students and educational institutions based on assessed needs in Iran.

The Iranian embassy in New Delhi acknowledged contributions in a post on X: “We sincerely thank the kind people of Kashmir for standing with the people of Iran through their humanitarian support and heartfelt solidarity; this kindness endures.” A video shared by the embassy showed a widow donating gold she had kept as a memento of her husband, who died 28 years ago.

That post was subsequently pulled down by the embassy, though the mission later posted again, thanking the people of India and Kashmir.

The embassy added that Kashmir’s contributions constitute a substantial portion of donations from India, with local sources estimating the Valley’s share at more than 40 percent of the total.

Security concerns

But while the majority of donations are directed towards humanitarian purposes, Indian authorities have raised concerns about potential misuse. Jammu and Kashmir Police and the State Investigative Agency (SIA) have said some funds collected through door-to-door drives by unverified individuals could be diverted to local networks of separatists and armed groups.

“People depositing money directly to the Iranian embassy should not be worried,” said a senior official, speaking on condition of anonymity. “Collections by middlemen without transparent monitoring may not reach the intended recipients.”

Authorities have also asked volunteers to maintain records to ensure compliance with fundraising regulations.

There’s a reason for this concern, say Indian authorities.

They point to the example of 2023, where funds collected in southern Kashmir – ostensibly for humanitarian purposes – were allegedly instead funnelled towards rebel groups. Organisers of the Kashmir drives for Iran maintain that all efforts are humanitarian.