Hello,
I find I have a lot of time sitting in fields during baseball practice looking at my phone right now, thinking about the market.
On 02/27/2026 the US began military action in Iran, and the S&P 500 was roughly 6861.45 at market close that day. On 04/20/2026 the S&P 500 closed at 7126.06. Year to date it is up 4.22% as if that date and the 1-month return is 9.27% roughly.
With 20% of the world’s oil impacted to varying degrees and an active hot war not allowing it to recover you might think the overall stock market would be down, not up. There is real risk of inflation continuing to increase in fact. Usually, all bad things for the stock market. When the war first started the S&P 500 fell 8% roughly. Imagine if you had locked in that loss when we were hitting all-time highs again in April.
Implications of the Iran war for U.S. inflation – Dallasfed.org
Stocks have touched record highs despite Iran war. Here’s why
So, what should you consider? Once again, timing the market is hard. But I also wanted to point out a couple of key drivers of the current market rally. The first is the AI tech boom is starting to become similar to the industrial revolution, or the information age. We are seeing huge investments in AI and active large-scale use, and it is just beginning. I love this chart below showing just how big the spending on AI is.
Just how big is the AI investment wave?
The second thing is something called M2 money supply. A lot of people pay attention to the Federal Reserve and interest rate policy. But one of the other things the Federal Reserve helps control is the amount of money in circulation. On 12/1/2025 the Fed announced it would stop shrinking its Treasury holdings. In fact, they have been increasing them, thus putting money into the financial system. The more money there is usually leads to both inflation and increases in investments. This is on top of potential rate reductions.
Fed winding down balance sheet contraction amid tightening money markets | Reuters
One other thing you might not have noticed is asset allocation and rebalancing might be winning right now. If you consider Fidelity Asset Manager’s fund FAMRX doesn’t have a track record of beating the S&P 500 but right now it is and it makes somewhat sense when you have this much disruption that could occur. So, I am watching if rebalancing and asset allocation will make a stronger comeback similar to the late 90’s early, 2000’s.
If you would like to chat about your overall situation, make time on my calendar, if you have questions or feel stress this is my time to work for you.
https://outlook.office.com/book/FortressMegaCalendar@carrol.com
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