S&P 500 weathers turbulence, tech remains strong
The S&P 500 erased steep losses closing higher after a positive turn in geopolitical headlines, with tech earnings sustaining the rally.
The market initially reacted with surprising indifference to U.S. military actions in Venezuela and Iran, though oil prices did spike. Investors are preparing for a more volatile market ahead as the war triggers unintended consequences. Tech sector earnings are still expected to be a critical growth pillar, with projections of over 20% earnings growth for the first quarter of 2026. Excluding tech, S&P 500 earnings growth would be significantly lower. Geopolitical tensions, especially involving the U.S. and Iran, contributed to market volatility. Despite the tensions, the longer-term impact on financial markets has typically been limited. Goldman Sachs suggests that a sustained period of higher oil prices could pose the biggest threat to U.S. equity earnings this year. They estimate AI investments will account for a significant portion of S&P 500 earnings-per-share growth in 2026.
