The Middle East conflict didn’t scare investors in the US stocks

US stocks remain resilient, supported by broad investor confidence. Geopolitical conflicts will end sooner or later, whilst the S&P 500, Nasdaq, and Dow Jones indices are rising thanks to a strong economy and corporate profits. If tensions in the Middle East do not trigger stagflation or recession, and earnings expectations remain positive, there is still room for further market gains.

The upward revision of the consensus forecast for first-quarter corporate earnings from 10.9% before the war in Iran to 11.9% seems unexpected. Morgan Stanley notes that it is extremely rare for analysts’ estimates to rise amid falling share prices. The bank anticipates S&P companies’ earnings to grow by 20% over the next 12 months, a trend that has typically followed recessions.

Nationwide believes that the market continues to buy the dips. Positive news from the Middle East will prompt major investors to pull back, triggering a rally in the S&P 500.

The FxPro Analyst Team