Markets are on edge as tensions between Russia and Ukraine rise. JPMorgan put together a list of companies that are the most — and least — exposed to the region. Overall, the firm said that while the tensions are a low earnings risk for U.S. corporations, the indirect risks are potentially more substantial. Higher oil and food prices, for example, could mean a slowdown in consumer spending and global growth. Ripple effects could also be felt through supply chain distortions, cybersecurity risks and credit write-downs. "[A]n energy price shock amidst an aggressive central bank pivot focused on inflation could further dampen investor sentiment and growth outlook," Dubravko Lakos, JPMorgan's chief U.S. equity strategist and global head of quantitative research, said Tuesday in a note to clients. Looking forward, Lakos said tightening monetary policy "remains the key risk for equities as central banks attempt to aggressively re-anchor inflation expectations lower." Energy remains JPMorgan's top sector pick, and has been the firm's highest-conviction sector since 2021. While the group led all S & P 500 sectors in 2021 — and it's outperforming again this year — the firm noted that longer-term energy stocks have lagged the broader market. A number of oil and gas companies make the firm's screen of stocks that could see positive impacts from escalating geopolitical tensions. Oil prices jumped to their highest level in more than seven years on Tuesday, and should they keep on climbing exploration and production companies could benefit. JPMorgan pointed to names such as EOG Resources , Pioneer Natural Resources , Devon Energy and Occidental . The firm also highlighted integrated giant Exxon . Materials companies Mosaic and CF Industries could also see upside. Metals companies stand to benefit too, amid price gains in raw materials. The firm pointed to Alcoa Corporation , Cleveland-Cliffs and U.S. Steel , among others. On the flip side, there are also companies that could be negatively impacted due to direct revenue exposure to the region. That includes names such as Linde , Arconic and Boeing . Airlines also have exposure, with JPMorgan pointing to Delta , United and American Airlines , while discretionary names such as McDonald's and Carnival Corporation could also take a hit. — CNBC's Michael Bloom contributed reporting.
Oil well pump jacks operated by Chevron Corp. in San Ardo, California, U.S., on Tuesday, April 27, 2021.
David Paul Morris | Bloomberg | Getty Images
Markets are on edge as tensions between Russia and Ukraine rise. JPMorgan put together a list of companies that are the most — and least — exposed to the region.