A ramp-up in fighting between the U.S. and Iran over the weekend has left Wall Street reconsidering its expectations for the war’s economic impact.
The U.S. completed its 10th straight night of strikes against Iran on Monday, after the Houthis in Yemen declared a maritime embargo against Saudi Arabia
This comes after a third service member died amid recent fighting that could mean the war is entering a longer-term and deadlier era. President Donald Trump vowed the U.S. would retaliate, saying in a Truth Social post “they will pay.” Investors appear to keep brushing off the latest flareup in tensions, with the S&P 500 only fell marginally in Monday’s session after a losing week. It also remains just 2% below its all-time high set in June.
Still, economists are worried that energy prices once again ascending could weigh on consumers and the broader economy. ‘All about duration’ As far as the stock market goes, the war in the Middle East has had little impact. Since sagging to a closing low of 6,343.72 in late March, the S&P 500 has bounced to all-time highs. That’s in large part due to the assumption that neither the U.S. nor Iran will want a return to outright war — an undesirable outcome, as both stand to lose if the global economy tips into a recession.