S&P 500 Holds Up as Analysts Lift Forecasts Past Iran War
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- S&P 500 has held up far better than global peers since the U.S. and Israel attacked Iran on Feb. 28, down just 2.6% in March to 6,699.38, while South Korea's Kospi fell 11.1% over the same span (FactSet data).
- Ed Yardeni of Yardeni Research attributes the resilience to Wall Street analysts continuing to raise consensus earnings estimates for 2026 and 2027, with no adverse impact from the conflict yet priced into profitability forecasts for large-, mid-, or small-caps.
- S&P 500 aggregate forward earnings climbed to a record $328.80 per share last week, pushing the implied forward P/E ratio down to 20.2 from 22 in late January — meaning valuations are actually compressing even as estimates rise.
- Yardeni expects U.S. equities to keep outperforming until the Strait of Hormuz reopens, though he flagged that analysts could yet revise lower if the conflict drags on.
- Monday's session reflected the same tone: S&P 500 +0.50%, Dow +0.70%, Nasdaq +0.31%, with the Cboe Volatility Index dropping 9.05% to below 24 from above 27 the prior week.
- Brent crude held above $100 a barrel while U.S. crude eased; Steve Sosnick of Interactive Brokers called 'the lack of concern here' the biggest story, noting the U.S. is now a net oil exporter — unlike during the 1970s shock that investors keep comparing this to.
- U.S. 10-year Treasury yields continue climbing toward 4.49%, signaling market doubts about additional Federal Reserve rate cuts that would normally support stock prices.
Why it matters: The bet embedded in U.S. equities right now is that the Iran conflict will not dent corporate profits — analysts have not adjusted 2026 estimates at all. With Brent above $100 and the forward P/E already compressed from 22 to 20.2, investors have less valuation cushion if those estimates finally get marked down.
