Despite the outbreak of war with Iran, equity markets have shown surprising resilience, with no significant sell-off reported. Raymond James attributes this stability to robust macroeconomic data from early 2026 and a short-term concentration of elevated oil prices, which have limited downside pressure on credit and equity markets. However, the upcoming deadline set by Donald Trump for a deal with Iran poses a critical test for investors, as Nasdaq 100 futures remain within a downward price channel and below the 200-session moving average.
Ed Yardeni of Yardeni Research remains optimistic about the S&P 500, noting that current valuations are attractive and historically, equities have performed well following major military conflicts. The forward P/E ratio has declined to 19.8, slightly above the 10-year average, while forward earnings have risen by 12.7%, indicating that the market’s valuation compression reflects multiple compression rather than weakening fundamentals.
Market professionals should watch for potential volatility as the Iran situation unfolds, but the current market environment may offer attractive entry points for equities, particularly in light of historical performance trends following conflicts.
Source: xtb.com