Markets Shrug Off War, Pushing Record Highs: Lessons for Investors?

Stock markets are looking past the US-Iran war, and you should too in order to grow and preserve your investments, affirms the CEO of one of the world’s largest independent financial advisory organisations, urging investors to see beyond the headlines dominating the geopolitical narrative.

The bullish analysis from deVere Group’s Nigel Green comes as the US and Iran remain locked in a battle for control over the Strait of Hormuz, with both sides effectively choking off traffic during an extended ceasefire, but as global stock markets register record highs.

Yesterday, Wall Street pushed further into uncharted territory. The S&P 500 closed at a fresh all-time high, rising around 1%, while the Nasdaq jumped roughly 1.6% to set another record. The Dow Jones Industrial Average added more than 300 points. Strength was not confined to the US.

Europe’s STOXX 600 climbed to its highest level in months, Germany’s DAX hovered near record territory, and France’s CAC 40 advanced firmly.

In Asia-Pacific, Japan’s Nikkei 225 remained close to multi-decade highs, while India’s benchmark indices continued their upward trajectory, reflecting sustained global risk appetite.

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

He continues: “Donald Trump extending the ceasefire has reduced immediate escalation fears, yet tensions in the Strait of Hormuz still carry major implications for oil supply and inflation. Energy markets remain sensitive, and disruption ripples quickly into global pricing.

“Even so, equities are advancing because the corporate earnings backdrop remains so compelling.”

Tesla reported stronger-than-expected quarterly results, supported by expanding investment into 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,” notes the deVere CEO.

“Earnings growth tied to AI and tech is driving a powerful re-rating of global equities. Companies at the centre of this transformation are attracting capital at scale because they are building the infrastructure for future economic expansion.”

The shift in global capital flows is becoming increasingly evident. Taiwan’s stock market has overtaken the UK in total market capitalisation, reaching approximately $4.1 trillion, underpinned by semiconductor dominance.

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

Nigel Green comments: “Taiwan’s ascent captures a deeper reality. Capital is moving decisively toward regions and sectors that are integral to AI and tech development.

“Semiconductor supply chains, advanced manufacturing, and digital infrastructure are commanding premium valuations because they sit at the core of future growth.”

He adds: “Taiwan Semiconductor Manufacturing Company (TSMC) represents a significant share of that market and is central to 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 accelerated sharply in recent weeks, putting the market on track for one of its strongest months on record.

Across Asia and other growth regions, sustained inflows contrast with more muted interest in legacy-heavy indices.

Risks linked to the Middle East remain material. Oil price volatility tied to disruption risks in the Strait of Hormuz has the potential to feed into inflation and influence monetary policy decisions. Global supply chains also remain exposed to any sustained restrictions in key shipping routes.

Nigel Green comments: “Geopolitical developments will continue to create volatility, particularly in energy markets. Investors must factor in inflation and stagflation risks and potential policy responses. Ignoring these elements would be complacent.”

He concludes: “Global markets are advancing because the underlying growth drivers are powerful and accelerating.

“AI and tech are reshaping the global economy at speed, creating opportunities across multiple sectors and regions.

“Investors who recognise this and position early are likely to benefit most.

“Waiting for uncertainty to clear often means missing the most significant phase of the opportunity. This is the signal markets are giving us in real time.”