The stock market has recovered all of its losses and is now actually up (SPX +0.9%, NDX +2.9%) since the Iran conflict began on Feb 28. Brent crude still +38% higher than it was before the U.S. bombed Iran’s military sites, but if history repeats should continue to decline over the next 6 months, as it did after Russia attacked Ukraine in 2022. Stocks aren’t expensive relative to 10yrTYs, with the 2026 P/E 21.4x (E/P of 4.7%, +40bp spread vs current 10yrTY of 4.3% in line with historical norms), and FY’2026 S&P 500 EPS expected to be +17% YoY vs FY’2025.
I have maintained throughout the Iran conflict that stocks would reclaim their all time highs, and with the fighting now wrapping up and earnings season starting strong, would maintain that bullish positioning.
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