Overview
- The S&P 500 was down about 2% for the year as of the March 17 close despite heightened energy and geopolitical risks.
- Oil climbed above $100 per barrel following the Iran conflict, with reports of restricted transits in the Strait of Hormuz and damage to regional energy infrastructure.
- Market pricing suggests investors expect a short-lived confrontation rather than an extended ground war, limiting equity downside for now.
- Safe-haven demand has strengthened the U.S. dollar, which can help temper inflation by making imports cheaper.
- Analysts have raised S&P 500 profit forecasts, and Ed Yardeni cited a record forward EPS estimate of $328.80.