Gold attracted $2.8B in inflows last week—its largest in two months—as investors sought safety from rising geopolitical risk and monetary uncertainty. Energy stocks also surged, and as the chart below shows, energy funds just posted their biggest weekly inflow since October 2023.
‍

U.S. equities saw $37B in inflows, with small- and mid-cap stocks leading the charge. Emerging markets rallied, and even previously shorted energy ETFs bounced back.
‍

All of this happened with investors still sitting on the sidelines. Hedge funds and algorithmic strategies remain lightly invested, with equity exposure at some of the lowest levels in over a year. That means there’s less fuel for panic—and more room for upside if momentum builds.
‍

Strategists are increasingly favoring a “barbell” approach: pairing high-growth U.S. tech with undervalued European stocks, mixing LNG and gold exposure, and balancing defense with infrastructure. Hartnett expects slowing growth to push Treasury yields lower, potentially setting up the Fed’s next pivot at Jackson Hole.
‍

Whether this strike is the end of it—or just the beginning—investors are positioning for both scenarios. With sentiment already washed out, even a small escalation or surprise truce could send markets swinging.
‍

Volatility isn’t the risk now—it’s the baseline.

‍