US S&P 500 Index

The S&P 500 closed down 0.2% overnight as the Iran situation weighed on risk assets. Still, if you stand back and look at a chart of the S&P500 over the last 3 years, it’s simply consolidating before another likely leg higher – there’s nothing scary from a technical perspective. However, it feels very different when you read the news! As we know, President Donald Trump declared the Iran ceasefire effectively over at the NATO summit in Turkey, fuelling concerns of renewed Middle East conflict and lifting oil prices. The renewed geopolitical risk has caused investors to understandably recalibrate risk when comments such as “I think it’s over. I don’t want to deal with them anymore. They’re scum”, cross-trading screens.

Nine out of eleven sectors retreated overnight with only energy and tech supporting the broader market. However, at this stage MM believes investors should focus on traditional metrics like earnings, holding the view that this latest round of volatility creates some opportunities, it may be another uncomfortable chapter, but we don’t believe it’s time to panic.

• We can see the S&P 500 making new highs through 2026 with a broadening of the bull market, as investors become more comfortable with bond yields and the economic backdrop.