Citadel Securities Expects Stocks and Bonds to Rally: Here’s Why
Citadel Securities believes the worst-case tail danger from the Iran battle has been “considerably truncated,” positioning each shares and bonds for a rally.
The view, outlined by Nohshad Shah, displays easing extreme-scenario dangers as geopolitical incentives more and more favor de-escalation.
Rally in Stocks and Bonds Is Coming as War Tail Risks Shrink
Shah wrote in a note that Iran’s management is primarily focused on regime survival. At the identical time, China has robust incentives to push for de-escalation. Together, these dynamics counsel the chance of additional navy escalation is fading.
“The contours of what follows will develop into clearer within the coming weeks, however for markets, essentially the most related level is that we seem to have considerably truncated the tail of the worst-case state of affairs,” he stated.
Despite the US-led Hormuz blockade, Shah maintains his view {that a} decision is taking form. He recommended the battle’s “finish recreation” is approaching as each Washington and Tehran face rising prices from extended hostilities.
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US fairness markets appeared to agree with that evaluation. Google Finance knowledge confirmed that the S&P 500 climbed 1.02% on Monday, rising to 6,886. The index has erased almost all its losses because the Iran warfare started in late February.
The Nasdaq Composite gained 1.23%, the Russell 2000 Index rose 1.5%, and the Dow Jones Industrial Average added 0.6%. The rally prolonged positive factors from final week, when the S&P 500 recorded its longest winning streak since October 2025.
Previously, BitMine’s chairman, Tom Lee, also projected that the inventory market had bottomed and the index may hit document highs this 12 months.
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