The Stock Market Is On Fire Because Investors Don't Care About Iran Anymore

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The S&P 500 gained 10.4% in the month of April, which is the 13th time in history that the index gained at least 10% during a single month. Of those 12 other times, only twice was the S&P 500 not higher 12 months later. Carson Group’s Ryan Detrick shows the average return 12 months later has been nearly 14%, which suggests current stock investors are poised for strong performance through the rest of this year. Yesterday’s new all-time high in the S&P marked the 7th all-time high during April. Bluekurtic Market Insights explains “this often indicates more new highs are yet to come. Since 1950, the S&P recorded 7+ April all-time highs only 7 other times. In each case, the year ended positive, with a median gain of 26%.” Strength begets more strength. All-time highs bring more all-time highs. But we are seeing strong positive performance across the entire stock market, not just in the S&P. JC Parets writes “the Dow Jones Industrial Average, Dow Jones Transportation Average, Nasdaq 100, S&P 400 Mid-caps, Russell 2000 Small-caps, the Russell Micro-cap Index and the S&P 500 Large-caps all just closed the month at the highest levels in American history, again.” Not bad for a stock market that people predicted would have entered the next Great Depression last year, or a market that was supposed to suffer because of the Iran war and short-term oil shock. So why is this happening? Why is the stock market so resilient in the face of global conflict? Jim Bianco had a great take recently where he described the market’s psychology. He explained his view by saying “Why is the stock market ignoring 4.41% on the 10 year note? Why is the stock market ignoring $120 on crude oil? I would argue to you that the stock market believes the single biggest story today is AI. It believes in the power that AI is going to be transformative for the US economy. That is driving it more than whatever’s happening in the Strait of Hormuz.” I agree with Jim. It may sound crazy, but Americans are not going to be affected as much by what happens in the Strait. Artificial intelligence is already infiltrating their lives, empowering higher levels of productivity, and driving the costs of certain goods and services down. The conflict in Iran is driving oil prices higher, and by extension the CPI numbers, but Americans are less dependent on oil than ever and the increase in inflation is still within the range of the last few years so the comparative change is less noticeable. On top of those facts, the market likely understands that AI is a structural tailwind to the economy and society, whereas the conflict and resulting oil prices will be temporary. Regardless of whether you agree or not, the market is screaming from the top of its lungs. It is telling us that investors don’t care about the Iran-related issues. There is one game in town and that game is AI. Until we see some material issues in the AI market, I would expect the US stock market to continue going higher. You are going to see it in semiconductors, data centers, power generation, model companies, large scale tech firms, commodities, chemicals, photonics, and many other verticals. This is a wide-spread, generational bull market that we are living through. The best investors find a trend and ride it for as long as possible. AI is presenting that opportunity right now. The question is whether you have the courage to jump onboard and hold on tight for the ride. Hope everyone has a great day. I will talk to everyone on Monday. - Anthony J. Pompliano Founder & CEO, ProCap Financial (Nasdaq: BRR) 🚨 ProCap Insights: Agentic Research for Investors Who Want To Make Money Last week, ProCap Financial launched ProCap Insights , the first agentic research offering in finance. 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