Is the Stock Market Wrong About the Iran War?
The stock market is trading as if the war in Iran is sure to end after a two-week ceasefire, with the S&P 500 on pace for a third consecutive week of gains. However, other markets such as gold, crude oil, and the bond market are warning that Wall Street's optimism might be disappointed.
The stock market is rising after a two-week ceasefire in the Iran war. The S&P 500 is on pace for a third consecutive week of gains, with a cumulative rise of 10.4% from late-March lows. US PPI data showed wholesale inflation was steadier than expected, rising 0.5% in March. Despite surging energy prices, the PPI report appeared benign. Other markets are more cautious, with gold prices and crude oil prices still reflecting war-related losses. The yield on the 10-year US Treasury bond has also moderated, warning of potential disappointment for the optimistic equity market.
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