There were reports on Monday that Iran suspended communications with U.S. negotiators amid Israel’s ongoing military campaign in Lebanon, raising doubts about a potential ceasefire agreement that President Trump had suggested was nearing completion. President Donald Trump told CNBC, “I don’t care” if peace negotiations with Iran are over, as quoted on CNBC.
However, shortly after, he posted on social media that negotiations with Iran were still underway and told ABC News he expected an agreement within the next week that would extend the ceasefire and lead to the reopening of the Strait of Hormuz, as quoted on The Hindu.
Against this backdrop, the following ETF strategies could help investors navigate the tough geopolitical scenario, especially if ceasefire talks take longer than expected to materialize.
Bet on Oil
Brent crude jumped as much as 7.1% to above $97.50 per barrel on June 1, 2026, while WTI crude gained up to 8.3% to trade above $94.50, at the time of writing. The rally followed reports from Iran’s state-run Tasnim news agency, indicating a breakdown in negotiations, with Tehran linking any ceasefire or diplomatic progress to an end to fighting in Lebanon, where Israel continues operations against Hezbollah, an Iran-backed militant group, as quoted on Yahoo Finance. United States Brent Oil Fund LP BNO added about 3.8% on June 1, 2026.
Inflation to Shoot Up: Bet on Commodities
With oil prices soaring, inflation is likely to shoot up. Commodities are often known as inflation-beating products. Invesco DB Commodity Index Tracking Fund DBC can thus prove to be a great bet currently. The fund DBC is up 33.7% so far this year.
Rely on Solid Current Income
High Inflation often results in higher bond yields. The Fed is also likely to act in a less-dovish or hawkish way if high inflation remains persistent. Against this backdrop, it is intriguing for investors to play high-income providing ETFs.
Global X SuperDividend ETF SDIV is one such example. The fund yields as high as 9.08% annually and charges 58 bps in fees. Note that solid current income goes a long way in protecting the capital losses, if there are any. The fund is up 4% this year.
Greenback to Gain?
Invesco DB US Dollar Index Bullish Fund UUP is up 2.4% this year and has added about 1.2% over the past month. If the crisis persists, the U.S. dollar — apparently one of the safe-haven assets — is likely to stay strong.
War or No War: AI Is the Winning Theme
War remains a cause of market uncertainty, particularly through its impact on oil prices, inflation and global growth. However, the AI boom continues to be backed by massive investments in data centers, semiconductors and enterprise adoption, making it a powerful structural growth theme. Hyperscalers are pivoting to an "AI-First" structure (read: Top Cloud ETFs to Buy as Hyperscalers Pivot to AI-First Platforms).
Most recently, NVIDIA NVDA unveiled a PC superchip at its GTC Taipei event that rivals chips from Intel (INTC) and AMD (AMD), Yahoo Finance tech editor Dan Howley reported. The processor, which includes a Blackwell GPU and Grace CPU, will power laptops from manufacturers including ASUS, Dell (DELL), HP (HPQ), and Microsoft (MSFT) when it lands this fall.
NVIDIA has committed at least $6.5 billion over the past three months to companies developing photonics technology, highlighting the growing importance of energy-efficient AI infrastructure. Hence, NVDA-heavy ETFs like VanEck Semiconductor ETF SMH should stay steady, even if Iran talks fall apart.
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Invesco DB US Dollar Index Bullish ETF (UUP): ETF Research Reports
VanEck Semiconductor ETF (SMH): ETF Research Reports
United States Brent Oil ETF (BNO): ETF Research Reports
Invesco DB Commodity Index Tracking ETF (DBC): ETF Research Reports
Global X SuperDividend ETF (SDIV): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
