Markets Bracing for War Shock Are Ignoring Resilient US Economy
Even as bond yields climb, big tech earnings are still growing and AI spending shows little sign of slowing.
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One overlooked fact as markets are reeling from the threat of an inflationary shock tied to the war in Iran, is that the US economy remains largely intact. Even as bond yields climb, big tech earnings are still growing and AI spending shows little sign of slowing—creating upside risk for those investors positioned for a downturn.
The conflict in the Middle East has introduced so much noise into investing, it’s become difficult to discern what the baseline is. So I thought it was interesting that Goldman Sachs’ economics team calls for 2.1% growth in 2026, with downside only to 1.8% in a “severely adverse” outcome. That’s not the levels we saw at the back end of 2025, but it’s still pretty good.