Wall Street's Big Three Still Bullish on US Stocks: Geopolitical Shocks Won't Alter Bull Market

Odaily According to strategists from major Wall Street banks, despite the risks posed by the Iran war, their bullish arguments for the US stock market remain valid. Rising oil prices, cost-of-living concerns, and uncertainty surrounding the Federal Reserve's interest rate outlook have driven the S&P 500 Index (SPX) to its worst two-week performance since the tariff turmoil of last April. Nevertheless, strategists from Goldman Sachs Group, Morgan Stanley, and JPMorgan Chase point out that earnings growth and valuations provide support; although valuations remain high, they are not as extreme as before. Wilson's base-case year-end target for the S&P 500 Index is 7800 points, implying approximately 18% upside from last Friday's close. Goldman's Snider expects the benchmark index to rebound to 7600 points.

As the war enters its third week, a sharp rise in crude oil has pushed up US Treasury yields and weakened bets on Federal Reserve rate cuts due to heightened inflation concerns. The Strait of Hormuz has become a focal point; any prolonged disruption would intensify market worries about the deepening global economic risks from the conflict. Despite this, US stocks have so far experienced only a moderate pullback since the outbreak of the Iran war, with less than 20% of developed market stocks technically oversold. (Jin10)