S&P 500 Continues to Surge Despite Middle East Turmoil: Analysts Predict Further Gains
The S&P 500 has continued its upward trend despite the recent turmoil in the Middle East. Despite the chaos caused by the Israel-Iran conflict and the subsequent U.S. bombing of Iran's nuclear facilities, the index has shown remarkable resilience.
The SPDR S&P 500 ETF (SPY) has surged more than 22.6% since President Trump paused implementing most reciprocal tariffs on April 9 for 90 days. The tech-heavy Nasdaq Composite has performed even better, rallying 30.4%.
Despite the geopolitical tensions, the S&P 500 retreated just 0.46% last week, while the Nasdaq 100 was essentially flat. On June 24, when markets opened after the U.S. bombing, stocks found their footing, surging on hopes for a ceasefire. The S&P 500 gained 1.1% on June 24, while the Nasdaq Composite gained 1.4% on the session. The gains continued as investors became increasingly comfortable with tensions de-escalating.
Veteran analyst Tom Lee suggested that the risks associated with geopolitical conflict may be priced in, setting the stage for more upside. Ambarella (AMBA) was among the biggest gainers, rising 21% on takeover chatter, while Coinbase (COIN) rallied 12% in the wake of stablecoin legislation.
The two sides seemed to move closer to a ceasefire as the day progressed, with Polymarket bets currently suggesting only a 4% chance that the important Strait of Hormuz would close before July. Similarly, Polymarket's data indicates less than a 1% chance that the U.S. declares war on Iran, and a 6% chance of another U.S. attack on Iran before the month's end.
In summary, despite the recent turmoil in the Middle East, the S&P 500 has continued its upward trend, with many analysts predicting further gains in the coming months. Investors should remain cautious but also take advantage of the current market conditions to position themselves for future growth.
