JPMorgan Chase traders are predicting three possible futures for the US stock market, all based on how the situation in the Middle East unfolds.
According to JPMorgan’s trading desk, if tensions ease slightly and shipping through the Strait of Hormuz stays limited, the stock market will likely see some short-term stability, Bloomberg reports.
If Trump were to ease up on his threats against Iran’s infrastructure, any benefit would likely be temporary. It might prevent Iran from attacking Saudi Arabia’s oil facilities and stop the Houthis from blocking access to the Red Sea, but it wouldn’t be a lasting solution.
If diplomatic efforts fail and military actions increase, JPMorgan predicts oil prices (West Texas Intermediate, or WTI) could jump to between $125 and $150 a barrel. This could trigger a widespread sell-off of assets, with airlines being hit hardest. Conversely, companies involved in energy, renewable energy, and defense are likely to see increased demand.
“In equities, all things energy would need to be bought.”
If things calm down or government policies change for the better, traders expect a broad market rally – meaning most stocks would likely rise. They believe smaller company stocks and technology stocks will lead the way, with homebuilding and retail companies performing particularly well. An improved economy could also benefit financial companies, and a weaker dollar could increase the value of precious metals. However, in this optimistic scenario, energy stocks are predicted to decline.
At time of writing, the S&P 500 is trading at 6,616, while oil is valued at $88.25 per barrel.
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2026-04-09 12:22