S&P 500 and Nasdaq Post Best Quarter Since 2020 Amid Iran War
U.S. equities surged to their strongest quarterly performance in five years despite escalating conflict involving Iran.
U.S. stock markets closed out their best quarter since 2020, with the S&P 500 and Nasdaq both posting significant gains even as military conflict involving Iran cast a shadow over global risk sentiment. The rally signals a striking degree of investor resilience in the face of geopolitical uncertainty that in prior cycles might have triggered broad market retreats.
The performance marks a notable divergence between headline geopolitical risk and equity market behavior, suggesting traders are either discounting the conflict's economic impact or betting on a contained and short-lived escalation. Markets have increasingly shown a pattern of absorbing geopolitical shocks quickly, particularly when underlying economic data and corporate earnings remain supportive.
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The quarter's gains stand out not only for their magnitude but for the conditions under which they were achieved. A shooting war involving a major oil-producing region would historically pressure markets through energy price spikes and tightened financial conditions, yet equities pushed higher — an outcome that analysts may point to as evidence of structural shifts in how modern portfolios respond to foreign policy crises.
Whether the momentum can carry into the next quarter will likely depend on how the Iran situation develops, as well as incoming data on inflation, Federal Reserve policy signals, and corporate earnings guidance. A prolonged conflict or broader regional spillover could test the market's apparent composure in the months ahead.
Continue reading at Reuters.
