The war cools off and the market heats up
On March 31st, a White House leak suggested that the War in Iran might be put on pause. The following weekend, the Pakistan peace talks were announced. Even though those talks collapsed, the bombing has stopped, and as this is written, the US Navy has blockaded the Straits of Hormuz, without a shot being fired.
A 3 Month Chart of the S&P 500 Index
With the war on pause since April 1st, the stock market has been up without a major (or even minor) interruption. This reminds us of the rally that began last April when President Trump modified his tariff plan. But this year’s rally is even more of a straight up move and now the market has reached new all-time highs.
Of course, this could end quickly if things go sideways in the Middle East. However, as we pointed out in our note of March 31 (The Trump Wars), the war was masking a number of positive factors, such as US economic strength and new highs in business profits.
Look out above.
Best regards,
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