Mr. Market Says The War Is Over

What if I told you that stocks are making all time highs, yet again. You wouldn't believe me, right? Well, believe it.

I've been posting a bit on LinkedIn lately. I know that many readers are not on this platform, so I will be looking to share my thoughts more broadly soon.

Via Yardeni Research - "The S&P 500 is now up 1.3% since Friday, February 27, the day before Gulf War III started (chart). So as far as the stock market is concerned, the war is over until further notice. The index will be at a new record high tomorrow if it increases by more than 11.22 points! It has been yet another V-shaped buy-the-dip recovery in the S&P 500. It has also been another buying opportunity arising from a geopolitical crisis, as we previously observed when we called the March 30 bottom the following day."

In fact, Deutsche Bank's Jim Reid sent this chart around the other day, and it's an absoluate nugget.

What it's showing us is the average historical performance of the US stock market leading up to a geopolitical shock (represented by the vertical black line), and how the stock market performs on average, 63 trading days after the initial shock. The average performance is in purple and the median in green. The current Iran strikes are in blue. Essentially what it's saying is that the stock market has performed, in response to the Iran strikes, more or less in line with other geopolitical shocks in the past.

To quote the legendary investor, Sir John Templeton, "The four most dangerous words in investing are: This Time It's Different."Public markets are a fascinating machine.

I posted this about a week ago:

Here's the same chart as of writing this:

Whilst still elevated, this has been a massive drop in a week.

‍Happy Liberation Day

Back to the stock market.

One year ago today, markets found their footing in the shadow of uncertainty, digesting President Trump's tariff announcements and quietly beginning their ascent. Since then, the S&P 500 has climbed over 30% (price only). Not because the world became clearer overnight, but because markets rarely wait for clarity.

Markets anticipate. They discount. They move.

Which brings us to today. Did we just witness another bottom, sparked by the ceasefire? Maybe.

But more interesting than the answer is the behaviour. The speed. The urgency. The willingness to bid risk back up at the first sign of relief. It's a reminder that markets are not reactive machines, they are forward-looking ecosystems, constantly scanning the horizon for inflection points. And when they sense one, even faintly, they don't hesitate. They pounce. By the time the narrative feels comfortable, the move is often already well underway. The opposite is also true.

The lesson? The market doesn't wait for permission. It moves on expectation. And if you're waiting for certainty, you're probably already late.

Take the long view.