US stock markets have experienced volatile sessions in recent recessions, amidst increasing tensions between Israel & Iran. This is especially true because Iran plays an important role in global oil supply.
Steve Eisman (host of “The Real Eisman Playbook”, a podcast) says that the conflict between Israel and Iran could be “unbelievably beneficial” to financial markets.
At the time this article was written, the S&P 500 benchmark index had already risen by more than 20 percent compared to its low for the year.
Why does the Israel-Iran Conflict benefit markets?
Steve Eisman calls the Iranian attack a success for the global market, as the country had been on the verge of nuclear status before it flared up. This would have led to a regional arms race, which he says could have caused a lot of harm.
The nuclear threat is temporarily lessened now that the regime has been pushed back. Eisman, in an interview this morning with CNBC, explained the following:
Iran is run by an evil death cult. I believe it is very important to get rid of this death cult, especially when they are close to obtaining nuclear weapons.
Eisman says that after an initial drop in US stock prices in response to the Israel-Iran war, the markets have stabilized. This is because investors are now recalibrating and beginning to take into account the geostrategic benefits of a nuclear-free Iran.
Eisman: Tariffs can affect US stock
Steve Eisman says that the tariff policy of the Trump Administration is what’s on his mind and has the most power to influence the S&P 500.
Eisman believes that the US financial market and economy will remain robust as long as President Obama signs tariff-free agreements with other countries.
The fundamentals of the US economy – including full employment, flexibility in the service sector, and energy independence — support growth over time and long-term gains.
He argued that a recession could be inevitable if the new taxes lead to a trade conflict.
Does the S&P 500 still have any upside?
Eisman made his remarks shortly after Citi increased its S&P year-end price target to 6,300. This indicates that there is potential for a further 5% increase from the current level.
Scott Chronert warned clients in a recent letter that policy volatility may continue into the second half of 2025.
The Citi analyst recommended that investors have dry powder ready for when US stock prices drop. He added, “Investors tend to ignore shorter-term noises in aggregate.”
Citi is not the only bank that remains bullish about S&P 500. RBC, Deutsche Bank Barclays and JPMorgan are among the other banks that revised upwards their targets for year-end.
As new information becomes available, this post Israel-Iran conflict is deemed a ‘unbelievably good’ thing for the markets by ‘Big Short Investor’ may change.
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