The Iranian state television announced on Tuesday morning that both countries had agreed to a ceasefire. The announcement followed shortly after US President Donald Trump claimed a deal had been reached. However, Israel has not officially confirmed the ceasefire and instead told The New York Times that Iran continues to launch missiles.
The Israeli military reported that, within one hour, citizens had to seek shelter three times due to fresh missile attacks from Iran. Despite these developments, Clissold stated that markets are reacting calmly. He referred to historical data from more than 60 crisis events in US history.He said, “We’ve studied almost 60 different crisis events… going back to 1907. There’s a pretty consistent pattern where there’s an initial knee-jerk reaction, but in short order, the market tends to recover.”
Meanwhile, oil prices have eased. WTI crude fell over 5% in early Asian trading, while Brent prices shed 8% overnight. Prices are now below where they were before Israel’s initial strike on Iran, reinforcing the idea that the risk premium is receding. Oil’s down some 15% from that $80 high. It’s a clear indication that the market is saying, ‘Well, this is done for now,’ Clissold noted.
Also Read: Geopolitical risks seen as contained, says Renaissance’s Pankaj MurarkaHe expects several headwinds for the US economy in 2025. “US economic growth is likely to slow. Earnings growth, particularly from the Magnificent 7 stocks, is likely to slow quite a bit. Inflation is most likely to increase somewhat, partly due to the housing market being quite inelastic and prices remaining elevated.”
Clissold also warned about the growing risk posed by tariffs, with US trade policy becoming more unpredictable. “Markets have gotten a little complacent when it comes to tariffs,” he said, stating that the expected 10–15% blended rate could reduce S&P 500 profit margins. “If S&P companies absorbed all of that cost, it would knock about 100 basis points — or one percentage point — off margins. Realistically, maybe it’s about half that,” he added, estimating a 50-basis point hit to earnings growth. That could push 2025 S&P 500 earnings growth closer to 5%, down from the current consensus of around 10%.
Also Read: India stands out as top investment pick in a diversifying world, says BlackRock’s Gargi Chaudhuri
Clissold does not expect a major market decline. “To think we’re going to get huge gains from here is probably a little bit wishful thinking,” he cautioned, “but we don’t see a major crash either.” His year-end target for the S&P 500 stands at 6,350, and he recommends maintaining a “slight overweight to stocks versus bonds,” anticipating a choppy but upward path ahead.
Catch all the latest updates from the stock market here
Also, follow live updates on the Israel-Iran conflict
