March 9 (Reuters) - The escalating war in the Middle East has investors questioning some of 2026's most popular trades and themes, with global equities slumping, the dollar jumping and traders scaling back their bets for rate cuts from the Federal Reserve.

"This year, investors have been positioning for growth. A stagflationary shock was not part of the plan," said ING head of global markets Chris Turner.

"Investors are looking at things cautiously and would still have more to unwind."

Here are five popular themes that have been upended by the conflict in the Middle East:

1/ DOLLAR SHORTS SQUEEZED

Investors had been holding their largest bearish bet on the dollar since 2021 as recently as last month, according to weekly data from the U.S. markets regulator.

Expected rate cuts from the U.S. Federal Reserve gave little incentive to buy too heavily into the U.S. currency.

But after the start of the conflict, the dollar has hit its strongest level since last November, in a sign of a rush to safety.

"The U.S. dollar emerges as the biggest winner of the Middle East conflict," said Ipek Ozkardeskaya, senior analyst at Swissquote. "The U.S. economy will likely be more resilient to energy shocks."

The U.S. is a net energy exporter these days and imports just 17% of its needs, a 40-year low, according to Jean-François Robin, head of global research at Natixis CIB.

2/ REST OF WORLD EQUITIES SLUMP

Global equities, which began 2026 supported by a broad "buy equities" consensus, have slid sharply.

The MSCI World ex-US index fell abruptly after the U.S. and Israeli strikes on Iran, while the S&P 500 proved more resilient as investors favoured the U.S., given the economy is less reliant on energy imports.

"The conflict hasn't destroyed the 2026 long-equities thesis, but it has made it far more rate- and oil-dependent," said Lale Akoner, global market strategist at eToro, adding that if energy keeps inflation sticky, "multiples, not earnings, are the weak link."

She said earlier signs of leadership broadening beyond the United States have faded as investors returned to the depth and liquidity of U.S. markets.

Swissquote's Ozkardeskaya said the shock could shift flows toward energy-rich markets and weigh on energy-dependent economies, potentially halting the rotation from the U.S. to Europe and Asia.

3/ EMERGING MARKETS RATTLED

Emerging markets stocks and currencies were strong performers at the beginning of the year, with a jump of over 15% in EM stocks and a 1.9% rise in MSCI's index of emerging market currencies until last Friday.

But the two indexes lost 7% and 1.5% respectively last week, with sharp falls in strong year-to-date performers such as South Korea's Kospi.

"The biggest underperformers this week were the outperformers between January and February," Goldman Sachs said about emerging currencies in a note to clients on Wednesday.

The brokerage said de-risking was strongest in markets most exposed to the Middle East and oil shocks, such as Egypt, the United Arab Emirates and Thailand, and last year's outperformers like Korea, Brazil and South Africa.

Analysts at JPMorgan moved EMEA emerging market FX to 'marketweight' on Tuesday, and added Poland's zloty to their list of 'underweight' currencies, saying central and eastern Europe is particularly exposed to energy prices.

4/ FED RATE CUTS IN DOUBT

Surging energy prices stoked inflation worries and pushed traders to moderate their expectations on interest-rate cuts by the Fed.

Prior to the start of the conflict, markets had expected around a 50% chance of a rate cut at the June meeting, which would be the first under its new chairman. That has now been cut to around 25%.

The recent energy shock has pushed markets to scale back expectations for interest-rate cuts for the Bank of England and traders are now pricing for the European Central Bank to raise rates, rather than cut, this year.

"Some of the largest shifts in 2026 G10 central bank pricing have come in economies which were priced for further easing this year," Goldman Sachs said.

5/ BANKS

Banking stocks - which had logged modest gains earlier in 2026 - have fallen as investors reassess the economic fallout from disruption in the Strait of Hormuz.

The risk of higher energy costs fed fears that broader inflation pressures could return, raising the prospect of slower lending and weaker credit demand even if rates remain elevated.

While higher interest rates typically support bank margins, renewed inflation worries can curb borrowing and investment.

"The key risk to watch is credit spreads and private-market liquidity; geopolitical headlines matter mainly if they translate into tighter financial conditions," eToro's Akoner said.