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Money markets – do you see a pullback in US markets coming

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Question asked 24/04/2026

Money markets – do you see a pullback in US markets coming

The US share market has been fascinating lately with all the bad news on Iran and the strait of homuz the market S&P500 and Nasdaq are at all-time highs. S&P 500 PE’s Trailing PE 25x Forward PE 20-21x earnings Historic average 15x – 20x modern era average So on a value perspective you would not think the market is overly expensive compared to where it was earlier in the year. Earnings are expected to be good this quarter with talk of multiple expansion occurring this year, I guess my question to MM is do you see a pullback coming or do you see the US markets continuing higher in 2026 with a few speedbumps on the way? thanks Andrew

Answer

Hi Andrew,

If we stand back and look at the long-term chart of the US S&P 500 the Iran War has indeed only been a speedbump at this stage.

President Trump is going to be keen to turn his efforts towards the US midterms in November and a healthy stock market appears a “must” if he wants to improve on the polls which have moved against him through the Iran War. We believe the bad news out of the US is likely finished for at least 6-months which should help the ASX, although it hasn’t recently.

Liquidity is a vital ingredient for stocks to advance, the buying has to come from somewhere. US high-yield credit spreads are around 287bps — comfortably in the “healthy” range and well below the ~500bps level that typically signals stress. With US credit markets telling us liquidity is abundant and the risk of corporate default is very low the market is getting the green flag. Earnings have indeed been good so far this quarter with multiple expansion our preferred scenario with plenty of liquidity pushing valuations higher.

We remain bullish towards US stocks through 2026, a test of 7500, or even 8000, by the S&P 500 wouldn’t surprise.

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US S&P 500 Index

LAST UPDATED 23/04/2026 10:27

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Afternoon report 24/04/2026

The Match Out: ASX claws back early losses, SUN impresses on FY27 outlook

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