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US Stocks Hit Record High Amidst Iran War, Driven by AI and Corporate Earnings
US Stocks Reach Record High Amid Geopolitical Risks
Amidst the Iran war and energy supply shocks, US stocks hit a historical high last Thursday (16th). This reflects investors' expectations for a short-term de-escalation of the Middle East conflict, coupled with optimism regarding the artificial intelligence (AI) boom and robust corporate earnings. The S&P 500 Index initially fell by approximately 8% after the outbreak of the Iran war on February 28 but then rebounded strongly, climbing about 11% from its late March low to reach an all-time high.
Market Sentiment of 'Trump Always Chickens Out' and Tech Sector Momentum
The market is reflecting expectations that former President Donald Trump would de-escalate conflicts when economic pressure rises, a trading logic dubbed 'Trump always chickens out' or TACO. Past instances, such as the market rebound after Trump's 90-day tariff postponement following the US government's announcement of tariffs on multiple countries, serve as the basis for this expectation. Furthermore, AI and tech stocks, accounting for nearly half of the S&P 500's market capitalization, act as key drivers supporting the market independently of war factors. Experts identify the current period as a 'tech boom' and maintain high optimism for future growth.
Corporate Earnings and Tax Policies Provide Support, Risks Remain
Robust US consumer spending and a stable corporate earnings environment also underpin the stock market's rise. Tax policies promoted by the US government, including accelerated investment depreciation mechanisms, have helped boost corporate after-tax profits. However, Pierre-Olivier Gourinchas, Director of Research at the International Monetary Fund (IMF), warned that even with a temporary ceasefire, the conflict has already caused some economic damage, and downside risks remain high. Concerns are also raised that a prolonged war could lead to a deeper impact on the global economy.
*Source: news.cnyes.com (2026-04-17)*
