Investors appeared to respond with caution following the recent U.S. military strikes against Iranian targets, reflecting a belief that these actions could have successfully diminished Iran’s nuclear ambitions. Jeremy Siegel, a finance professor at the Wharton School and chief economist at Wisdom Tree, articulated this sentiment during an appearance on Finance Newso’s “Squawk Box.” “I think most people agree they are farther away from producing a bomb than they were on Friday, and that’s positive for the markets…for eventual settlement in the Middle East,” he stated.
Despite the tensions escalating with the United States’ airstrikes on three nuclear facilities over the weekend, stock futures remained relatively stable. President Donald Trump characterized the strikes as having “obliterated” the targeted sites and hinted at further military measures unless Iran seeks peace. Siegel underscored the nuances of the situation, noting, “This is a success to neutralize Iran – that’s positive – against the risks of retaliation, which is negative.” He explained that while positive factors have risen alongside challenges, the net impact on the market remains complex.
Traders are optimistic that Iran will refrain from actions that could escalate the situation into a wider conflict, particularly those that could jeopardize its regime. Potential Iranian retaliation could take the form of targeting U.S. personnel stationed at nearby bases or attempting to disrupt the Strait of Hormuz, a critical chokepoint for global oil shipments.
Looking ahead, Siegel suggested that barring any significant Iranian retaliation, the stock market might be poised for a substantial uptick, potentially reaching new record highs in the weeks ahead. “I would not at all be surprised to see in the next couple of weeks, assuming no big action by Iran… new all-time highs in the S & P 500 are certainly attainable over the next several weeks,” he remarked. The broader market has shown resilience since Israel’s initial offensive against Iran earlier this month, with the S & P 500 recording a 1% increase in June and remaining only about 3% shy of its peak reached in February.
