CEO Confidence Falls Into Negative Territory As Iran War, Economic Risks Pressure Global Business

Confidence among the leaders of the world’s largest corporations fell sharply in the second quarter as the Iran war, rising geopolitical risks and economic uncertainty weighed on business sentiment globally.

The CEO Confidence Measure compiled by The Conference Board in collaboration with The Business Council dropped to 47 in the second quarter from 59 in the first quarter. A reading below 50 reflects more negative than positive responses from executives. The survey included 141 Fortune Global 500 CEOs and was conducted from May 4 through May 18.

The decline marked a reversal from the surge in optimism seen earlier this year, when executives responded positively to expectations surrounding tax cuts and lighter regulation under President Donald Trump’s administration.

“CEO confidence fell back into negative territory in Q2 2026, reversing the surge in optimism in the first quarter,” Dana M. Peterson, chief economist at The Conference Board, said in the report.

The worsening outlook comes as the Iran war continues to disrupt global energy markets and trade routes, including the Strait of Hormuz. Reuters reported this week that tanker costs and regional energy prices have risen as instability in the Middle East affected crude exports and shipping activity.

According to the survey, 47% of CEOs said economic conditions were worse than six months earlier, up sharply from 8% in the first quarter. Only 15% said conditions had improved, down from 39% in the prior quarter.

Executives also reported weakening conditions within their own industries. About 33% said conditions in their industries were better than six months ago, down from 42% in the first quarter, while another 33% said conditions had worsened, compared with 14% previously.

Short-term expectations also deteriorated. Around 40% of CEOs expected economic conditions to worsen over the next six months, up from 13% in the first quarter, according to the survey. Only 24% expected improvement, down from 43%.

Roger W. Ferguson Jr., vice chairman of The Business Council and chair emeritus of The Conference Board, said CEOs also reported growing worries about cyber threats, geopolitical instability and energy-related risks.

Despite weaker confidence, many CEOs maintained business investment plans. The survey showed 37% of executives expected to increase capital spending over the next year, up from 35% in the first quarter, while only 8% anticipated reducing spending plans. Most CEOs said they did not expect major revisions to existing investment strategies.

Hiring expectations remained cautious. About 31% of CEOs said they expected to reduce their workforce over the next 12 months, slightly above the 28% who anticipated expanding staff levels. Forty percent expected no workforce changes.

The survey also showed continued focus on artificial intelligence adoption inside major corporations. A majority of CEOs, 56%, said AI would have only a moderate impact on their industries rather than fundamentally transforming them. Nearly one-quarter said more than half of their workforce would require upskilling within two years because of AI-related changes, as per a news release published by PRNewswire.

Corporate confidence had climbed significantly earlier this year before momentum weakened following renewed trade tensions and the escalation of the Iran conflict. Axios, noted that optimism tied to Trump administration policies faded as geopolitical risks and economic uncertainty intensified.

The CEO confidence index previously reached a pandemic-era high of 82 in 2021 before declining sharply during the inflation surge and economic slowdown in 2022.