Argentina Market Outlook: Impact of Middle East Conflict on Bonds, ADRs, and Oil

Argentine financial markets experienced a broad-based rally on Wednesday, April 8, 2026, with the S&P Merval index climbing 2.3% to 2,762,722.16 points. The dollar-denominated Merval also rose, gaining 2.6% to reach 1,894.79 points.

The surge occurred despite continued global volatility linked to escalating tensions in the Middle East. Banking and energy stocks led the rebound, with Banco de Valores jumping 6.2% and the state-owned energy company YPF rising 5.3%. Other notable gains included Domec, which soared 7.5%, and fruit producer San Miguel, which saw a gain exceeding 7%.

Loma Negra was one of the few exceptions to the rally, declining slightly by 0.3%.

Bonds and Country Risk

Argentine sovereign dollar bonds also saw increases during the session. The Global 2029 bond rose 0.8%, while the Bonar 2029 bond gained 0.7%. According to market reports, the country’s risk premium settled around 554 basis points.

American Depositary Receipts (ADRs) participated in the gains, led by YPF at 6%, Telecom Argentina at 4%, and Cresud at 3.7%. However, not all ADRs followed the trend; MercadoLibre fell 0.3% and Bioceres Crop declined 2.8%.

Market Catalysts

Analysts noted a lack of significant domestic drivers for the gains, though reported purchases of reserves by the Central Bank of Argentina (BCRA) were highlighted. Market sentiment was briefly boosted by a statement from Donald Trump, who claimed the war in the Middle East was practically finished.

Reports from GBM indicated that the conflict had previously created a compás de espera, or a waiting stance, within risk markets.

Context of Recent Volatility

The April 8 gains follow a period of significant pressure in March 2026. On March 3, 2026, Argentine assets tumbled following renewed cross-border attacks involving the United States, Israel, and Iran, which threatened energy supplies via the closure of the Strait of Hormuz.

During that period, the S&P Merval index dropped more than 2%, and ADRs in New York plunged by as much as 7%. Specific losses included Edenor, which dropped 6.9%, IRSA, which fell 6.5%, and Grupo Supervielle, which declined 6%.

Sovereign bonds also faced steep losses on March 3, with the Bonar AL35 falling 1.8% and the Global GD35 dropping 1.4%. This volatility pushed country risk to 594 basis points, its highest level since mid-December 2025.

Inflation and Economic Pressures

The financial volatility coincides with rising inflationary pressures. Data published by the INDEC national statistics bureau showed that February inflation rose 2.9% monthly, exceeding the 2.8% median estimate from economists. Annual inflation accelerated to 33.1%, up from 32.4%.

The primary drivers for February’s price increases were housing, utilities, and food and non-alcoholic beverages, specifically beef. The administration of President Javier Milei continued to strip energy subsidies during February to maintain fiscal balance, amid a roughly nine percent year-on-year drop in state revenues.

In March 2026, local fuel prices jumped approximately six percent. This increase was attributed to a one percent monthly fuel tax increase and adjustments for inflation from January and February.

Citigroup analysts forecast in a March 1 note that the conflict in the Middle East would result in an annual inflationary impact of 0.9 percent for Argentina.