The U. S.-Iran ceasefire in early April has sparked renewed interest in U. S. stocks, known as TINA (“There Is No Alternative”) trades, due to optimism for peace, strong U. S. earnings, and the economy’s resilience to energy price shocks. Investors previously focused on cheaper overseas markets, attracted by a weaker dollar, but the ceasefire has shifted attention back to the U. S., which has seen record-high stock prices on Wall Street following President Donald Trump’s announcement on April 7. Since the ceasefire, global investors have added a net $28 billion to U. S. equities, with U. S. investors contributing nearly $23 billion.
Prior to the ceasefire, there was significant withdrawal from U. S. stocks, totaling a net outflow of $56 billion for the year. However, the ceasefire has improved confidence in the U. S. market, leading the S&P 500 index to exceed pre-war levels by 2%. Experts like Michael Browne from the Franklin Templeton Institute noted that the U. S. economy has historically performed well in the long term and is currently investing heavily and producing strong results.
Despite previous predictions favoring European stocks over U. S. stocks following the beginning of Trump’s second term in January 2025, investors are now reconsidering. Gabriel Shahin from Falcon Wealth Planning highlighted the ongoing strength of the S&P 500, and Jim Caron from Morgan Stanley indicated a shift in strategy toward reducing European stock positions and increasing U. S. exposure. Major investment banks are also adjusting their ratings on U. S. equities based on strong corporate earnings, especially in technology, despite challenges faced by some sectors due to the conflict in the Middle East.
For the first quarter, S&P 500 earnings are expected to grow nearly 14%, while European earnings are projected to rise by only 4.2%. The International Monetary Fund has slightly lowered growth estimates for both the U. S. and the eurozone, indicating more significant potential impacts on European and Asian economies due to the conflict.
Post-ceasefire, there has been a noticeable reduction in investment in European and Asian markets, with a report from Bank of America indicating that South Korean funds have seen record outflows and European stocks experienced their largest outflows since late 2024. Although U. S. equities still show a cumulative net outflow of $30 billion for 2026, this has significantly decreased from previous levels. The S&P 500 recently surged past the 7,000 mark, achieving over a 10% gain in just 11 days, marking an unusually rapid rally in the context of market trends this century.
With information from Reuters
