Records Hold as Markets Look Through Middle East Risk

US equities eked out fresh records as investors looked past another wave of Middle East headlines and leaned into the view that the conflict may stay contained enough to avoid a deeper hit to growth, earnings, and energy flows. Technology led again, helped by Taiwan Semiconductor’s strong outlook on AI demand, while the broader tone reflected a market still willing to buy risk despite higher oil, firmer Treasury yields, and growing warnings from policymakers and strategists that geopolitical and debt-market risks may be underappreciated.

Key Headlines & Market Movers:

• Geopolitics Remained in Focus: Stocks held firm even as officials and investors weighed a potentially lengthy path to any US-Iran agreement, with President Trump pointing to progress on a deal and announcing a 10-day ceasefire between Israel and Lebanon. That helped ease immediate fears of a broader regional escalation and a more severe disruption through the Strait of Hormuz, though crude remained elevated and the market’s reaction suggested investors are increasingly fatigued by conflict-driven headlines unless they materially worsen the outlook.
• AI Optimism Kept Powering Tech Leadership: The Nasdaq extended its winning run to another record, driven in part by Taiwan Semiconductor’s strong profit growth and upbeat revenue outlook, which reinforced confidence that AI-related spending remains resilient despite geopolitical uncertainty. Microsoft outperformed among the largest US tech names, and the broader message from the session was that investors are still rewarding companies tied to durable capex and cash-funded AI investment, even as selectivity within the theme continues to increase.
• Macro Resilience Offset Caution: Better-than-expected jobless claims supported the view that the US economy remains on solid footing, helping equities absorb modestly higher Treasury yields. At the same time, comments from former Treasury Secretary Henry Paulson about the need for a contingency plan for the US government debt market, along with IMF and World Bank warnings that investors may be underestimating the war’s economic impact, served as a reminder that markets are balancing near-term resilience against a more fragile medium-term risk backdrop.

S&P 500 Sector Performance

Looking Ahead

The next test for markets is whether the current optimism can be validated by events rather than headlines, especially around any concrete progress between the US and Iran, the durability of the Israel-Lebanon ceasefire, and whether energy markets calm further. Investors will also be watching earnings and macro data for confirmation that growth and corporate spending remain strong enough to justify record equity levels even with oil elevated, yields drifting higher, and geopolitical risk still unresolved.

Disclaimer

Duncan Williams Asset Management is an SEC registered investment adviser. SEC registration does not constitute an endorsement of Duncan Williams Asset Management by the SEC nor does it indicate that Duncan Williams Asset Management has attained a particular level of skill or ability.

This material prepared by Duncan Williams Asset Management is for informational purposes only and is accurate as of the date it was prepared.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Past performance is not indicative of future results. Investing involves risks, including the risk of loss of principal. Before making any investment decision, investors should consult with their financial advisor, consider their individual financial circumstances, and carefully review all relevant information and risk factors. Duncan Williams Asset Management assumes no responsibility for errors or omissions, nor does it accept liability for any loss arising from reliance on this information.

Advisory services are only offered to clients or prospective clients where Duncan Williams Asset Management and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Duncan Williams Asset Management unless a client service agreement is in place.

This material is not intended to serve as personalized tax, legal and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Duncan Williams Asset Management is not a legal or accounting firm. Please consult with your legal or tax professional regarding your specific tax situation when determining if any of the mentioned strategies are right for you.

‍