All-Time Highs. All-Time Disconnect.
The Market Isn’t Policy.
I’m all for a green market and positive investor sentiment. Personally, I'm a permabull. However, in the current investor market, there are green benchmarks and red flags everywhere.
The United States is in a situation where we’re in a "conflict entanglement," one we thought would ultimately be resolved more quickly than it has been. We tried to institute a ceasefire, but that broke down as negotiations failed. There is no lesser of two evils. There is no clear way out. We’ve gone from bad to worse at break neck speed.
As this has unfolded, we have not (re)instilled trust in the American people, or even earnestly tried, in my opinion. We also have not articulated any clear direction. And yet, the stock market continues to rise after 168 young children died in an “Oops, our bad” bombing. Twenty percent of the world's oil passing through the Strait of Hormuz could become taxed (still not 100% clear if this is happening yet) when it was toll-free prior to February 28. But the stock market, and the S&P in particular, continues to go up as if nothing is wrong. Looking at the daily chart, it looks like a student with their hand raised in class, anxiously waiting to be called on by their teacher.
I understand the importance of ensuring that malicious actors aren’t shorting the valuation of American companies during times of tumult. But what’s taking place at the moment isn’t going to win back favor for the fractured reputation of the United States. This isn’t the way. What is the way? I have ideas, not all the answers. However, what I do know is that the stock market, busting up like bamboo growing in wetlands in China, the S&P up over 600 points over 11 sessions during an unresolved "conflict," is insensitive, tone-deaf, and the optics are terrible. I remember when for 9/11, the stock market closed for 4 days.
The market cannot virtue signal what policy has failed to do, which is communicate honestly and sincerely with the American public and restore confidence based on a clear, achievable American goal. And even when that goal is achieved, or any goal for that matter (because there have been so many), the stock market cannot substitute for policy failure.
Just as we can’t bomb an ideology out of the minds of a people, we cannot pump the stock market to win over the hearts of people either. As smart as the people in Washington think they are, the American people aren’t stupid. Recent Pew data shows that roughly 60% of Americans don’t agree with what we’re doing in Iran, and they’re not going to change their minds because their stock portfolio is “hopefully” up. And I say “hopefully” because while the indices are at all-time highs, actual stock prices are not. Contrary to this market exuberance, likability can't be bought. People will still feel the way they feel, even if their stock portfolio is up.
The cachet of all-time highs used to mean something. On Wall Street, it seemed to be something we strived toward through strong company performance and quarterly earnings, it felt like a national accomplishment, if you will. But in the last six months, the S&P has hit all-time highs twice. When something happens repeatedly, it loses its allure. The question I've been asking myself today in particular is what exactly are we celebrating? Earnings season just started. Is this supposed to be exciting, amid the long-term cost of being back again in the Middle East, doing God knows what, for how long? What happened to our commitment to tackling our own issues and minding our domestic business?
I don’t agree with him often, but I think Ken Griffin is right; if the Strait of Hormuz remains closed for an extended period of time, it could push not only the United States, but the world, into a global recession. Not to mention, if others decide to join this entanglement in the Middle East on Iran’s side (and why wouldn’t they at least consider it), I think it will weaken America domestically (that’s another post for another day). Talk about turning lemons into lemonade, we've served Iran a (new) revenue stream on a silver platter it didn’t have before February 28. Additionally, we gave China the opportunity for oil trade to shift from the petrodollar to the petroyuan. And if that isn't enough, this is a gigantic distraction from what we need to be focused on for American 3.0’s growth: artificial intelligence and technology dominance, digital currency, clean and renewable energy innovation, infrastructure advancement, and continued healthcare development.
No amount of shorting oil, pocket-watching the ships entering and leaving the Strait of Hormuz, publicly picking at Jerome Powell, and the Pope, or pumping the stock market for umpteen sessions will change that. The derailment of America’s growth, at least what I thought would be four years of America First, is disappointing to say the least.
The stock market can be green for another eleven sessions, but that doesn't matter to the 60% of Americans who oppose being in a war, or to those who can’t pay for groceries, are working two jobs just to cover rent, and still can’t afford healthcare.
Is the thought that if the volatility index (VIX) dives to 2, that makes America look strong because our stock market is at ATH on all indices? Or is it possible it shows our adversaries exactly where our pain points are, especially when the market tries to respond fundamentally to current events? There’s actually a Lego diss track depicting such. It’s embarrassing.
What’s happening right now is illogical. It reflects how disconnected Wall Street is from Main Street, and from the real concerns of the majority of Americans, who have been frustrated by issues like layoffs and the fact that wages aren’t keeping up with the cost of living.
The market can’t carry what policy refuses to confront, and the signal is like nails on a chaulk board.
The answer isn’t for the stock market to rise, and the desired effect doesn’t hit at all.
Sources:
UNICEF — Brutality of war measured in children’s lives as hostilities escalate in Iran https://www.unicef.org/press-releases/brutality-war-measured-childrens-lives-hostilities-escalate-iran
BBC — Strait of Hormuz tensions and global oil impact https://www.bbc.com/news/articles/c78n6p09pzno
Pew Research Center — Americans broadly disapprove of U.S. military action in Iran https://www.pewresearch.org/politics/2026/03/25/americans-broadly-disapprove-of-u-s-military-action-in-iran/
