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Stocks and gold slid on Fed rate hikes and Iran deadlock concerns.

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  ·        AI bubble panic is also accelerating rotational shifts from tech to real economy stocks; metals and defense stocks are under stress as the Iran war may be over. ·        The market is now assuming an 80% probability of a Fed rate hike of 25 bps in Dec '26 and higher for longer monetary policy, contrary to earlier perceptions. ·        At around 305 projected EPS for CY27 and a 22-20 average fair PE (base case) against a 22-20% average CAGR, the average fair value of SPX-500 may be around 6700-6100 (against the recent high of 7600). ·        The Fed may be on hold in 2026 rather than hiking amid transitory, hotter inflation and a stable labor market. Wall Street was buoyed for the last few weeks on the Iran deal and AI optimism despite a fragile ceasefire, Trump’s constant back-and-forth stances, and growing concern over the AI bubble, especially after B...
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Wall Street surged to LTH on AI and Iran deal optimism

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  ·        Under Trump, from trade to the Iran war, both Wall Street and Main Street are vulnerable to Trump’s morning moods & truths and nonstop media bytes & spams. ·        Trump is under immense media, public, and political pressure for an early face-saving exit from his Iran war mess. ·   Ahead of the Nov '26 midterm election, Trump has to bring down the price of oil, and thus he has to first offer concessions to Iran to reopen the Strait of Hormuz. Wall Street is surging and making LTH (Lifetime High) almost every other day on AI and Iran deal/war optimism. The US is the biggest beneficiary of both the Iran and Ukraine wars, as it’s the biggest producer of both oil and military equipment. These wars and never-ending geopolitical tensions are also acting as a fiscal stimulus for the US economy post-COVID. Both Wall Street and Main Street, in terms of higher industrial (military equipment) production, defe...
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Will Trump blink first for a face-saving exit from his Iran war mess?

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  ·        Ahead of the Nov. '26 US midterm election, Trump has to ensure lower oil prices for Main Street; thus, he can’t afford an extended hardline stance. ·        Trump may blink first and allow an initial extension of the Iran war ceasefire by 60 days by removing the US naval blockade of the SOH. ·   Trump may eventually extend the ceasefire till Dec '26 for a ‘great deal’ with Iran. On Friday, May 29, 2026, the market's focus was on Trump’s morning moods and truths as he was set to approve/disapprove a provisional MOU with Iran. Eventually, Trump posted a truth: ·        Iran must agree that it will never have a nuclear weapon or bomb. ·        The Hormuz Strait must be immediately open, with no tolls, for unrestricted shipping traffic in both directions. ·        All water mines (bombs), if any, will be terminated (we hav...
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