Wall Street has flipped from panic to indifference in a month. The S&P 500 and Nasdaq Composite hit record highs on Wednesday even as Brent crude moved back above $100 and the Strait of Hormuz stayed closed, a sharp reversal from the selloff that hit stocks when oil first jumped.
The market is leaning on two ideas: the Iran shock will not last long enough to derail growth, and earnings are still doing the heavy lifting. FactSet data showed 86 percent of S&P 500 companies reporting so far beat profit expectations, while tech stocks, helped by renewed enthusiasm for AI, have regained leadership after earlier valuation worries.
That sets up a classic tension between momentum and complacency. Some strategists say investors are pricing in firm retail spending, stable labor markets and an earnings backdrop strong enough to absorb higher energy costs, but others argue the market is assuming too much about the conflict’s duration and the damage it could do to supply chains, inflation and profits.
For now, the bigger story is that risk appetite has not just survived the war, it has broadened. Tech’s rebound is doing more than offsetting geopolitical anxiety, which matters because it suggests investors are once again willing to chase growth even with oil volatile and policy uncertainty still hanging over markets.
