It is too early to pop the champagne: even with encouraging signals from the Middle East, talks have not halted the conflict. Iranian rockets have struck Tel Aviv, Saudi Arabia is discussing participation in the US–Israel coalition, and Washington is preparing to deploy about 3,000 troops to the region. Under these conditions, the possibility of a ground operation remains, and the S&P 500, after a recent rise on expectations of a "quick deal," has been forced to slow again.
One of the key drivers of last year's double-digit rally was retail investors. They actively bought the dips and supported broad market gains. But geopolitics has changed the mood. According to Vanda Research, in late March, retail participants were net sellers for the first time since 2023. In addition, JPMorgan records a notable drop in retail flows. However, if de-escalation occurs, the pattern could repeat. For now, investors remain cautious even amid the S&P 500 rally. Follow the link for more details.
Yesterday, equity indices finished with small gains: the S&P 500 added 0.54%, the Nasdaq 100 gained 0.77%, and the Dow Jones rose by 0.66%. Today, however, the picture has shifted: index futures moved lower, while oil prices climbed. Markets remain uncertain due to geopolitical tensions in the Middle East and conflicting signals from the United States and Iran about ceasefire talks — investors are cautious and trimming risk exposure.
In Asia, indices fell by roughly 1% as higher energy prices threaten to stoke inflation and slow growth. Brent added about 2% to $104.30 per barrel, and the 10-year Treasury yield rose to 4.36% (up 3 bps). Against this backdrop, gold fell by 1.1% to $4,450 an ounce, silver declined by 2% to $70, and Bitcoin slipped below $70,000. Follow the link for more details.
The equity market is not ready to roll over yet, although headlines from the Middle East remain worrying: Iran rejected the US plan and set out its own terms for ending the conflict, including recognition of control over the Strait of Hormuz, security guarantees, and compensation for damages. The White House has threatened escalation if talks do not begin, yet an S&P 500 correction is being delayed.
Overall, geopolitics remains a factor for short-term volatility, but corporate earnings continue to play the primary role over longer horizons. Morgan Stanley expects earnings to rise by roughly 20% over the next 12 months, and the S&P 500 earnings consensus for January–March has increased despite the risks. The market is also supported by White House policy and by confidence that retail investors continue to buy the dips, and a possible improvement in the Middle East could further boost the index. Follow the link for more details.
QUICK LINKS
Contact Us 
