Markets look past conflict as investors bet on long-term growth: Ed Yardeni

Global equity markets may be navigating a period of uncertainty, but investor sentiment suggests that the worst of the recent sell-off could already be behind us. As geopolitical tensions continue to unfold, market participants appear increasingly focused on long-term opportunities rather than short-term disruptions.

In a conversation with ET Now, market strategist Ed Yardeni, from Yardeni Research shared an optimistic outlook, noting that history often turns crises into opportunities for investors.

“We have all known for quite some time that the history of geopolitical crisis is that they create some very good buying opportunity for stocks. The problem is we all know that and so you do not get a very long period of time to buy these stocks when they do sell off. We had significant selloffs and people just kind of jumped in. The market is clearly looking way past the war. The perception is that this will maybe last a few more weeks. It is not likely to last a few more months. And meanwhile the technology revolution continues to create great opportunities not just in AI, but robotics, autonomous driving, and people are just looking for opportunities to invest in the future and the future looks bright even though the near-term situation is still volatile and somewhat dangerous.”

Despite ongoing tensions, markets have shown resilience, raising questions about whether prolonged conflict would significantly derail the recovery. Yardeni suggested that investors may already be pricing in much of the risk.

“Well, it is interesting. We have had a global rebound in stocks and I can understand why the US stock market has rebounded because we are not really dependent on foreign oil. We do not really have much coming from the Strait of Hormuz, but Europe does, India does, China does, and South Korea, Taiwan. But yes, some of these countries you are seeing investors jumping into the technology sector. Some of these countries you are seeing investors buying into the banking sector, healthcare sector. So again, the perception is that this is not a tolerable situation. The global economy obviously is not going to do well if the Strait of Hormuz stays closed and so there is a lot of pressure on both sides to just get this thing settled.”

The rebound has not been limited to one region or sector. Technology, banking, and healthcare stocks across multiple economies have attracted fresh capital, signaling confidence in structural growth trends even amid uncertainty.

At the same time, commodity markets—particularly oil—remain a key concern. Prices have surged in response to supply risks, and a return to earlier lows appears unlikely in the near term.“It is a very good question. It is very unlikely we are going to go back to $60 to $70 oil. I think more likely is that the price of oil will settle in somewhere, let us say, between $75 and $95, that is relatively high to where we were, but it is not prohibitively high. It is not a level that would sink the global economy. So, we are going to learn to live with higher energy prices for a while. It is going to take a while for oil to come out of the strait once it is actually open. It is going to take a while for infrastructure and the countries around the Persian Gulf to be rebuilt and repaired. So, given all that, we are looking at higher for longer oil prices, but something under $100 and I think the world can tolerate that.”

For now, markets seem to be striking a balance—acknowledging near-term volatility while positioning for long-term growth. As geopolitical developments continue to evolve, investors appear willing to look beyond immediate risks and focus on the broader trajectory of the global economy.