Markets shrug off war, hit record high: Lessons for investors?

The CEO of one of the world’s largest independent financial advisory organizations says stock markets are looking past the US-Iran war, and so should you, to grow and protect your investments, and urged investors to look beyond the headlines dominating the geopolitical narrative.

bullish analysis from devere group Nigel Green comes as the US and Iran remain locked in a battle for control of the Strait of Hormuz, with both sides effectively blocking traffic during an extended ceasefire but with global stock markets hitting record highs.

Yesterday, Wall Street ventured further into uncharted territory. The S&P 500 gained nearly 1% to close at a new all-time high, while the Nasdaq jumped nearly 1.6% to set another record. The Dow Jones Industrial Average added more than 300 points. The power was not limited to America.

Europe’s STOXX 600 climbed to its highest level in months, Germany’s DAX edged closer to record territory, and France’s CAC 40 advanced strongly.

In Asia-Pacific, Japan’s Nikkei 225 remained near multi-decade highs, while India’s benchmark indices continued to move higher, reflecting continued global risk appetite.

Nigel Green comments: “Markets are looking beyond the war headlines and focusing on earnings, liquidity and long-term structural growth. Geopolitics matters, but it is not the sole driver of capital allocation.”

He adds: “Donald Trump’s extension of the ceasefire has eased fears of an immediate escalation, yet tensions in the Strait of Hormuz are still having a major impact on oil supplies and inflation. Energy markets remain sensitive, and global pricing disruptions are growing rapidly.

“Nevertheless, equities are moving forward because the corporate earnings backdrop remains so attractive.”

Tesla reported stronger-than-expected quarterly results, supported by expanded investments in AI compute, battery materials and autonomous systems, including robotaxi development.

“The results highlight how leading companies are doubling down on next-generation technologies that are reshaping entire industries,” says Deavere CEO.

“Earnings growth tied to AI and tech is driving a powerful re-rating of global equities. Companies at the center of this transformation are attracting massive amounts of capital as they build the infrastructure for future economic expansion.”

Changes in global capital flows are becoming increasingly apparent. Due to semiconductor dominance, Taiwan’s stock market has overtaken the UK in total market capitalization, reaching approximately $4.1 trillion.

In contrast, the UK market continues to trade around levels seen more than a decade ago, reflecting its lower exposure to high-growth sectors.

Nigel Green comments: “Taiwan’s rise reflects a darker reality. Capital is moving decisively towards sectors and regions that are integral to AI and technological development.

“The semiconductor supply chain, advanced manufacturing and digital infrastructure are getting premium valuations because they are at the core of future growth.”

He adds: “Taiwan Semiconductor Manufacturing Company (TSMC) represents a significant share of that market and is the center of the global AI ecosystem. Every major investment in AI, from hyperscalers to chip designers, ultimately depends on this supply chain. As such, investors are positioning accordingly.”

Foreign inflows into Taiwanese equities have surged in recent weeks, leading the market to one of its strongest months on record.

Across Asia and other development regions, the continued inflows contrast with more subdued interest in legacy-heavy indices.

Risks related to the Middle East remain material. Oil price volatility associated with risks of disruption in the Strait of Hormuz has the potential to fuel inflation and influence monetary policy decisions. Global supply chains also remain exposed to any continued restrictions in major shipping routes.

Nigel Green comments: “Geopolitical developments will continue to generate volatility, particularly in energy markets. Investors should take into account inflation and stagflation risks and potential policy responses. It would be complacent to ignore these elements.”

He concluded: “Global markets are on the rise as the underlying growth drivers are powerful and accelerating.

“AI and technology are rapidly reshaping the global economy, creating opportunities across many sectors and regions.

“Investors who recognize this and position early are likely to profit the most.

“Waiting for the uncertainty to go away often means missing the most important stage of opportunity. This is the signal the market is giving us in real time.”