S&P 500 and Nasdaq Post Best Quarter Since 2020 Amid Iran Conflict
U.S. equity benchmarks logged their strongest quarterly gains in five years, even as geopolitical tensions with Iran unsettled global markets.
American equity markets closed out their best quarter since 2020, with the S&P 500 and Nasdaq composite delivering returns that surprised analysts who had spent much of the period bracing for geopolitical fallout. The gains underscore a recurring theme in modern market history: headline risk and portfolio performance frequently diverge, sometimes dramatically.
The conflict involving Iran introduced meaningful uncertainty into energy markets and broader risk sentiment, yet institutional investors appeared to look through near-term volatility rather than retreat from equities. That behavior reflects a well-established pattern in which markets price geopolitical events quickly and then refocus on corporate earnings and monetary policy — the variables that tend to drive valuations over a full quarter.
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The comparison to 2020 carries its own weight. That year's standout quarter came in the immediate aftermath of the pandemic-era collapse, fueled by unprecedented fiscal and monetary stimulus. The fact that this quarter's performance rivals that era — without a comparable policy backstop — suggests underlying demand for equities remains resilient, even in a higher-rate environment where alternatives like Treasuries offer competitive yields.
What this quarter's results also reveal is the persistent gap between macro anxiety and market outcomes. Investors who stepped back from risk assets in response to Iran-related headlines would have missed a historically strong run. For long-term allocators, that is a familiar but uncomfortable lesson about the cost of reactionary positioning.
Continue reading at Reuters.
