Markets stay resilient even as geopolitical uncertainty lingers: Ed Yardeni

Even as geopolitical tensions persist in the Middle East and ceasefire negotiations remain uncertain, global markets appear to be signalling resilience. Investors seem willing to look beyond near-term disruptions, betting that stability will eventually return.

In an interaction with ET Now, market strategist Ed Yardeni from Yardeni Research highlighted how market behaviour is often more telling than individual opinions.

“More important than what I think is what the market is saying. It seems the market made a bottom at the end of March on ceasefire hopes. Even though it does not feel fully stable and oil is around $100, geopolitical crises have historically been buying opportunities. The market is looking through the war and expecting it to be behind us within 3 to 12 months, with oil likely settling in the $80–$100 range as economies adjust,” he said.

Ceasefire Still on Shaky Ground

Despite optimism in markets, the ground reality remains volatile. Repeated violations and deep-rooted tensions continue to cast doubt over the durability of any peace agreement.

Yardeni pointed to the unpredictability of negotiations and the strategic leverage held by Iran.“The US and Iran have negotiated for years without a deal. While Iran may have lost militarily, it still has strong control over the Strait of Hormuz, which gives it leverage. A deal is possible, but things could break down quickly. Even if conflict resumes, it is likely to last weeks, not months, before some form of agreement is reached,” he added.

Bond Market Calm Raises Questions
Interestingly, the bond market has remained relatively composed despite rising risks—something Yardeni believes may not fully reflect reality.

“I am surprised by how calm the bond market is. With higher defence spending and rising inflation, the idea that inflation will be ‘transitory’ may again prove wrong. Bonds do not look very attractive right now. Gold, too, has not behaved as expected—it corrected 10–15% and is currently stalled. Its next move likely depends on the war ending,” he said.

Investment Perspective
For investors, the takeaway is layered. Markets are not ignoring risks—they are simply discounting a future where current tensions ease.

Oil may remain elevated, inflation risks could persist, and traditional safe havens like gold may not deliver immediate returns. Yet, history suggests that such uncertain phases often present opportunities rather than long-term setbacks.

In essence, while headlines remain dominated by conflict, markets are quietly positioning for eventual normalcy.