The Strait of Hormuz Just Became the Only Chart That Matters: War breaks out in the Gulf, Oil rips past $100, and portfolios built for calm markets get tested fast.

Late on February 28, joint U.S.-Israeli strikes hit Iranian military and leadership targets, opening a conflict that would come to dominate markets for the rest of the year. Iran's response was to move on the Strait of Hormuz — the channel roughly a fifth of the world's seaborne oil trade passes through — declaring it closed to vessels tied to the U.S., Israel and their allies.

The market reaction was immediate and violent. Brent crude, sitting near $72 a barrel before the strikes, blew through $100 by March 8 for the first time in four years, on its way to a peak near $126. It was, by some measures, one of the fastest oil spikes on record. Equity markets took the hit alongside it: the S&P 500 logged its worst session in months on March 2, the Nasdaq fell to its lowest level since November, and the Russell 2000 underperformed everything. A separate "tariff tape bomb" from the White House on the same day made a bad tape worse.

This is the kind of month that reminds you why diversification isn't a slogan. Energy names were suddenly the best-performing pocket of the market for reasons that had nothing to do with anyone's quarterly guidance. Airlines and anything shipping-dependent got hit for the same reason. If your portfolio was positioned for "more of the same," February 28 was an expensive wake-up call.

We don't trade geopolitics — nobody has an edge predicting the next headline out of the Gulf. But we do take advantage of the markets when they misprice quality equities based on fear and external influences.