Hi ,

There’s been a lot of noise in the markets recently: war headlines, oil price concerns, and political uncertainty.

But when we look beyond the headlines, the actual data and market behaviour tell a clearer story.

1) Markets are not moving because of the war

The recent dip in markets actually started before the Iran conflict largely driven by an AI-related selloff, not geopolitics.

Since then, markets have recovered strongly even as the war continues, which tells us something important:

👉 Investors are focusing on fundamentals, not headlines.

2) Corporate earnings remain very strong

US companies grew earnings by about 19% year-on-year, with expectations of ~24% growth ahead.

This level of growth is typically only seen during strong economic periods — not during crises.

Interesting read: Investors return to US stocks as AI, earnings growth feed fear of missing out

3) It’s not just tech — the economy is holding up broadly

While companies like Nvidia are leading the AI boom, growth is still healthy across sectors.

• Financials and materials sectors are seeing strong profit growth
• Even companies like PepsiCo and Johnson & Johnson continue to deliver solid results

👉 This suggests underlying economic resilience.

4) Oil shocks are less impactful today

Unlike past Middle East conflicts:

• The global economy is less dependent on oil
• Price increases have been moderate vs past crises
• Inflation expectations remain stable

Interesting read: Oil Shocks Don't Bite Like They Used To

👉 Markets are not pricing in a major disruption.

5) The real driver: earnings and AI growth

A small group of AI-related companies is expected to drive a large portion of market growth in the coming year.

👉 This is what’s moving markets today, not geopolitics.

6) Risks are still worth watching

Of course, uncertainties remain:

• If the conflict escalates beyond the region
• If energy prices rise sharply
• Or if policy uncertainty increases

These could affect markets but they are not the base case for now.

Bottom line

👉 Markets may feel volatile day-to-day, but they are being driven by earnings strength and long-term growth trends

👉 As long as the conflict remains contained, its impact on markets is likely limited

If anything, periods like this are a good reminder:

Are we reacting to headlines…

Or positioning based on what actually drives long-term returns?

If you would like, we can take a few minutes to review how your portfolio is positioned and whether it’s structured to handle both uncertainty and opportunity ahead.

Best Regards,

Zest

Executive Wealth Consultant | Associate Estate Planning Practitioner |

Licensed General Insurance Advisory

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