Author: Davis Finke, CFA
This week, the S&P 500 and Nasdaq reached new record highs, suggesting investors are reassessing the potential impact of the conflict in Iran on the U.S. economy. With the ceasefire extended, near-term geopolitical risks have eased. While oil remains elevated near $100 per barrel, futures prices of roughly $80 by year-end suggest investors expect the disruption to be short-lived. That expectation has helped ease concerns about inflation, consumer spending, and corporate profits.
With short-term geopolitical concerns temporarily fading, investors have turned their attention back to growth and earnings. As first-quarter earnings season gains momentum, early results point to a continuation of the strength seen throughout 2025. More than 80% of companies reporting so far have beaten consensus estimates by a meaningful margin, reinforcing expectations for double-digit earnings growth in 2026. As anticipated at the start of the year, technology, materials, and financials are expected to lead, with artificial intelligence and data center buildout continuing to provide a meaningful tailwind.
Looking ahead to next week, the overall situation remains fluid. Investors will continue to watch developments in Iran closely, and any significant headlines could drive short-term market moves. In addition, with 180 S&P 500 companies expected to report results, investors should gain further clarity on the health of U.S. businesses, particularly large tech companies that have led the way for the last two years but declined at the start of 2026. Notable names reporting next week include Microsoft, Amazon, Alphabet, Meta, and Apple.
