Market Update | How Will the U.S.-Iran Situation Evolve? What Is Behind the Nasdaq’s Record High?

1. Geopolitical tensions in the Middle East persist, with conflicting signals from the US and Iran regarding potential de-escalation and a ceasefire expiring Tuesday night.2. Despite geopolitical uncertainty, the Nasdaq hit a record high, driven by a "sentiment bull market" in tech stocks, which are less impacted by oil price volatility.3. A divergence exists in asset performance; tech stocks rally while the Dow lags, oil prices and Treasury yields remain elevated, and gold has not fully recovered.4. Sector divergence is driven by oil price shocks and risk appetite, with tech benefiting from optimism about easing tensions and strong earnings expectations.5. Citigroup projects tech to contribute significantly to future EPS growth, supporting a bullish outlook on US equities, with an "Overweight" rating assigned.6. Market sentiment has priced out extreme conflict tail risks, but significant differences between the US and Iran make a short-term resolution unlikely.7. Scenarios include a stalemate with intermittent skirmishes, maintaining tech as a core theme but pressuring cyclical sectors, or comprehensive de-escalation leading to oil price declines and recovery in pro-cyclical sectors.8. Regardless of the geopolitical outcome, structural industrial themes and continued dissipation of tail risks are expected to favor market trends and liquidity.▶️ Download our app here:📌 Play Store: ⁠https://play.google.com/store/apps/details?id=com.tradingkey.mobile&hl=en⁠📌 App Store: ⁠https://apps.apple.com/us/app/tradingkey-stock-analysis/id6744304666📢 DISCLAIMERTradingKey provides general information on certain investment products. This information is not intended to constitute financial advice or a recommendation for any specific investment product.