Goldman Sachs Group Inc. CEO David Solomon said he's been surprised by the 'benign' reaction in financial markets to the Iran war, adding that it will take weeks to understand more about the situation.
Investors are considering whether this will become a more prolonged event and start to impact consumption, he said.
US assurances on securing shipping through the Strait of Hormuz have helped steady nerves in markets.
The Iran war has reverberated across the region, with Israel bombarding Tehran in a fresh wave of strikes.
The S&P 500 index of US stocks fell less than 1% across Monday and Tuesday, partly reflecting its exposure to large technology shares that have held their ground.
Since Solomon spoke, some moves have extended, with the MSCI Asia Pacific Index slumping as much as 4.5% and South Korea's Kospi plunging more than 12%.
India's rupee weakened to a record low on fears that higher energy prices will stoke inflation.
US Treasuries have fallen this week amid inflation concerns, reducing expectations for interest-rate cuts.
The dollar has strengthened, after a prolonged run of weakness.
