S&P 500 Hits Record Highs as Markets Shrug Off Iran Conflict

The S&P 500 index closed at a record high of 7,041.28 on Thursday, demonstrating a surprising resilience in the face of the ongoing conflict with Iran. Since U.S. airstrikes began on February 28, the global economy has faced significant headwinds, including the closure of the economically vital Strait of Hormuz and a subsequent spike in oil prices. Despite these pressures, the index has climbed 11% from its March 30 low and is up 2.9% year-to-date. Market strength is being driven by robust corporate fundamentals that outweigh geopolitical anxiety. Wall Street analysts are currently projecting 12% earnings growth for the S&P 500 in the current quarter, while profit margins reached a new high of 15% as of early April. This suggests that the majority of global corporations remain insulated from the direct destructive effects of the conflict. The resilience of equities is further highlighted by the poor performance of traditional safe havens. The U.S. 10-year Treasury yield rose from 3.95% on February 27 to 4.44% by March 27, causing bond prices to fall. Consequently, the Vanguard Total Bond Market Index Fund (BND) declined by approximately 3% in the month following the start of the war. Historical trends support the current market behavior. For instance, the S&P 500 has risen more than 60% since the Russian invasion of Ukraine in February 2022. This pattern indicates that while wars cause immediate distress and short-term volatility, the broader market typically adjusts and continues its upward trajectory based on corporate profitability rather than headlines.