# The Stock Market’s ‘Curious Exuberance’ Despite the Iran War

An episode of [Big Take](https://invisiblenetwork.ai/podcast/1578096201), 27 Apr 2026, 17 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/825d4e29-b616-46f4-afd7-ae2b0013005c/e682a5fe-309d-4917-afc5-b439015f6933/audio.mp3?utm_source=Podcast&in_playlist=8b1dd624-a026-43e9-8b57-ae2b00130066

Global markets have been remarkably resilient amid major geopolitical and economic disruptions, from the Iran war to US tariffs, as investors find cause for optimism in strong earnings and AI. On today’s Big Take podcast, Sarah Holder talks with Asia equities reporter Winnie Hsu, and Ruth Carson, chief FX/Rates correspondent in Asia, about what has kept markets strong — and what could shake them. Read more: Five Reasons Global Markets Are Holding Up Despite War in Iran We have a special Bloomberg subscription offer for podcast listeners at Bloomberg.com/podcastoffer. Hosted by Sarah Holder; Produced by David Fox; Reported by Winnie Hsu and Ruth Carson; Edited by Tracey Samuelson and Jeffrey Grocott. Fact-checking by Eleanor Harrison-Dengate; Engineering by Katie McMurran. Senior Producer: Naomi Shavin; Deputy Executive Producer: Julia Weaver. Executive Producer: Nicole Beemsterboer. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
[0:09] Speaker 2: It's a time of intense global uncertainty.
[0:12] Speaker 3: The US and Israeli militaries have carried out more than
[0:15] Speaker 3: one thousand strikes in the last three days.
[0:18] Speaker 2: Iran vowing to retaliate, unleashing fears the energy crisis is
[0:23] Speaker 2: dangerously spiraling.
[0:24] Speaker 3: Retail gasoline prices have surged by more than a dollar
[0:27] Speaker 3: a gallon. A man armed with guns and knives storm
[0:30] Speaker 3: the lobby outside the ballroom at the Washington Hilton where
[0:33] Speaker 3: the annual White House Correspondence Dientner was being held.
[0:36] Speaker 2: Typically headlines like these panic investors. But if you look
[0:41] Speaker 2: at the stock market right now, it tells a different story.
[0:45] Speaker 1: It's almost as if nothing has happened in the past
[0:48] Speaker 1: two months when you look at how markets swamped and
[0:51] Speaker 1: then now making record highs.
[0:53] Speaker 2: That's Bloomberg's Winnie Sue, who covers equities markets from Hong Kong.
[0:58] Speaker 1: So it seems like, you know, right now they're pricing
[1:01] Speaker 1: in that the worst is over and that the peak
[1:04] Speaker 1: of uncertainty is over as well.
[1:09] Speaker 2: Central banks and economists have cautioned that the worst actually
[1:13] Speaker 2: may be yet to come. That even if a ceasefire
[1:16] Speaker 2: holds and the Strait of hor Movez reopens to global
[1:19] Speaker 2: oil traffic. There are longer term economic risks for companies
[1:24] Speaker 2: and consumers, but investors have gotten good at shrugging off
[1:27] Speaker 2: these warnings.
[1:29] Speaker 3: When I went for coffee the other day with a
[1:33] Speaker 3: hedge pond trader, he looked at stock markets and said,
[1:37] Speaker 3: there is a very curious exuberance that's incredibly hard to explain,
[1:44] Speaker 3: and it's true.
[1:46] Speaker 2: Bloomberg's Ruth Carson, who covers the bond market and currencies
[1:49] Speaker 2: from Singapore.
[1:50] Speaker 3: Now, is there going to be a tipping point when
[1:53] Speaker 3: some lead people wake up to the reality that war
[1:57] Speaker 3: hasn't gone away, that oil is still disrupted, that soon
[2:01] Speaker 3: we're going to see this coming out in the economic data.
[2:09] Speaker 2: I'm Sarah Holder, and this is the big tick from
[2:12] Speaker 2: Bloomberg News today on the show. So far markets have
[2:16] Speaker 2: been brushing off the Iran war. What explains today's investor
[2:20] Speaker 2: confidence and what could shake it? Bloomberg's Ruth Carson and
[2:34] Speaker 2: Winnie Sue say there are a handful of reasons why
[2:37] Speaker 2: the markets are so far more resilient than expected.
[2:41] Speaker 3: This obviously the focus on fundamentals. People are focusing on
[2:44] Speaker 3: AI and it's disruption and all that, but when you
[2:48] Speaker 3: look at where we are week nine, week ten, week
[2:51] Speaker 3: eleven into the Iran wee, nothing's really changed here. So
[2:56] Speaker 3: I was having a chat with an analyst who was
[2:58] Speaker 3: holidaying in Australia and he's been following markets unable to
[3:06] Speaker 3: switch off because of the war, and he basically set
[3:12] Speaker 3: these people in general, not just investors, are becoming ever
[3:18] Speaker 3: more disensitized to both good news and bad. So think
[3:24] Speaker 3: about it, right, we're multi weeks now into the war.
[3:29] Speaker 3: Markets are signaling that, you know what, by stocks this
[3:32] Speaker 3: is fantastic, and bond markets are going no, it's really not.
[3:37] Speaker 3: But this stuck between a rock and a heart place
[3:39] Speaker 3: and not really moving when in which does not make
[3:42] Speaker 3: sense in theory. They should be gaining a lot more
[3:45] Speaker 3: than stocks for that safety bid. That weird disconnect is
[3:49] Speaker 3: showing how people have become desensitized to.
[3:52] Speaker 1: War, right.
[3:54] Speaker 2: I mean, we've been seeing this pattern over the past
[3:56] Speaker 2: few weeks where the Trump administration escalates or looks like
[4:00] Speaker 2: it's about to escalate attacks and around markets dip. Then
[4:04] Speaker 2: the Trump administration pivots or softens it stands and investors
[4:08] Speaker 2: who bought that dip stand to win when the market
[4:11] Speaker 2: inevitably bounces back. It's been called the taco trade. Trumpo
[4:16] Speaker 2: is chickens out. How is that cycle, that assumption booing
[4:21] Speaker 2: the markets right now and influencing investors.
[4:25] Speaker 1: Investors sharp pretty much just betting on the trump foot
[4:28] Speaker 1: to come through, and as we talked about how it
[4:31] Speaker 1: has shown up last year during Liberation Day and also
[4:35] Speaker 1: what we saw back in the rush of Ukraine War.
[4:38] Speaker 4: So with investors.
[4:40] Speaker 1: Betting on that to happen, they it actually makes it
[4:43] Speaker 1: more difficult for them to bet towards one site heavily
[4:49] Speaker 1: just because the risk of being caught wrong footed. And
[4:53] Speaker 1: hence we're seeing that trading volume remains very thin because
[4:58] Speaker 1: of the lack of conviction. And one investor put it
[5:01] Speaker 1: this way, actually that markets are right now in this
[5:04] Speaker 1: no war, no peace zone, so right in between. That
[5:07] Speaker 1: means there's no durable macro conviction at the point, and
[5:12] Speaker 1: we're only looking at some technical relief whenever escalation does
[5:17] Speaker 1: not worsen. And what that means for markets is that
[5:21] Speaker 1: money still has to go somewhere and somewhere credible. That's
[5:25] Speaker 1: where we're seeing right now. It's flowing into the ones
[5:29] Speaker 1: that have good fundamentals, which in.
[5:31] Speaker 4: This case are areas that are.
[5:33] Speaker 1: Showing earning strength as well as getting on the AI theme.
[5:38] Speaker 2: Well, let's talk a little bit more about AI, because
[5:42] Speaker 2: excitement and skittishness around this technology has pushed the markets
[5:46] Speaker 2: up and down over the past few months, even before
[5:48] Speaker 2: the around war. Of course, what role have AI and
[5:52] Speaker 2: tech stocks played in sustaining this recent rally.
[5:57] Speaker 1: That's a very interesting question because at the beginning of
[6:01] Speaker 1: the war, actually they were the ones that got hit
[6:05] Speaker 1: the worst because they were the ones that have surged
[6:08] Speaker 1: the most into the war. And also investors were talking
[6:12] Speaker 1: about because of these expectations for inflation that it's going
[6:17] Speaker 1: to hurt growth stocks more. In fact, these data centers
[6:21] Speaker 1: rely heavily on energy, so the higher energy prices actually
[6:25] Speaker 1: are supposed to be weighing on tech stocks even more
[6:28] Speaker 1: when it comes to the AI theme. However, recently, what
[6:33] Speaker 1: we are seeing is that the earnings really prove that
[6:38] Speaker 1: the demand itself remains very strong, and we saw that
[6:43] Speaker 1: in chip makers like s K Heinex, like TSMC posting
[6:48] Speaker 1: massive profit growth, and that goes to show how it
[6:52] Speaker 1: is actually quite insulated so far, just because the demand
[6:57] Speaker 1: is so strong.
[6:58] Speaker 2: And you've also been tracking earnings. The vast majority of
[7:02] Speaker 2: SMP companies that have already reported their first quarter results
[7:06] Speaker 2: have beaten analyst earnings expectations. So what does that say
[7:10] Speaker 2: about how businesses are weathering the uncertainty.
[7:14] Speaker 1: Yeah, Actually, surprisingly, we're seeing earning season having pretty robust so.
[7:18] Speaker 4: Far, showing you that they're rund risks so far have
[7:22] Speaker 4: been quite contained. But it's worth noting that it's just
[7:27] Speaker 4: first quarter earnings, and that includes two months that was
[7:32] Speaker 4: not impacted by the war, so only one month into
[7:35] Speaker 4: the round war, and obviously there's also kind of some
[7:38] Speaker 4: delayed effect as well. So while some investors may see
[7:43] Speaker 4: those as very positive signs, we actually should be expecting
[7:49] Speaker 4: the impact to come further down the road that can
[7:53] Speaker 4: make a more painful que two that might not even
[7:56] Speaker 4: show up in second quarter earnings, but somewhere down the road,
[8:01] Speaker 4: maybe showing up third quarter or fourth quarter. Because so far,
[8:05] Speaker 4: with this oil cushion that we're seeing, actually that some
[8:10] Speaker 4: of the economies have been releasing these oil supplies and
[8:15] Speaker 4: companies have all these extra over supply as well, so
[8:19] Speaker 4: these are helping companies to weather the impact so far.
[8:24] Speaker 2: So we you just mentioned this idea of an oil
[8:27] Speaker 2: cushion that countries all over the world have tapped their
[8:30] Speaker 2: emergency reserves to help mitigate the impact of price pikes.
[8:34] Speaker 2: That's especially true in Asia, which is the final destination
[8:38] Speaker 2: for the vast majority of the oil that normally moves
[8:40] Speaker 2: through the strait of horror moves. How important is that
[8:44] Speaker 2: oil cushion and how long can it last?
[8:47] Speaker 3: Psy context is incredibly important. We were talking about cushion
[8:51] Speaker 3: for instance, right the cushion buys this time, not safety.
[8:57] Speaker 3: So even if prices are let's call it one hundred
[9:01] Speaker 3: dollars per barrel today, if suddenly the world wakes up
[9:05] Speaker 3: or things that, you know, investors think that markets are
[9:10] Speaker 3: mispricing this risk and it suddenly turbo charges higher one
[9:14] Speaker 3: hundred and twenty hundred and thirty, then we're talking about
[9:18] Speaker 3: a big shock and a sudden one. There are more
[9:20] Speaker 3: and more people across the entire spectrum markets who are
[9:24] Speaker 3: sort of sounding the alarm here. The longer this goes on,
[9:28] Speaker 3: the more desensitized people are too in markets, the more
[9:32] Speaker 3: that breeds complacency. But no, when you look at the
[9:36] Speaker 3: volatility and when you look at how long this takes,
[9:39] Speaker 3: the cushion buys time, not actual safety. Right, The risks
[9:44] Speaker 3: are very much there still for elevated oil prices and
[9:48] Speaker 3: bond markets are kind of signaling that.
[9:51] Speaker 2: You said, this cushion buys time, but not safety. How
[9:56] Speaker 2: much time does it buy?
[9:58] Speaker 3: How long is a piece of If the war ends tomorrow,
[10:02] Speaker 3: that's a fantastic use of that time. But if we're
[10:06] Speaker 3: talking about if the oil crisis, the energy crisis continues
[10:11] Speaker 3: with another three months, six months, the longer the obstruction,
[10:16] Speaker 3: the longer the chokehold, supply losses suddenly deepen beyond what
[10:20] Speaker 3: reserves can be replaced. That's critical.
[10:26] Speaker 2: Coming up. Why there's less exuberance in the bond market
[10:30] Speaker 2: and the signals investors will be watching for from central banks.
[10:42] Speaker 2: The stock market has largely barreled ahead despite the headlines
[10:46] Speaker 2: of the past couple months. Same with commodities and bets
[10:50] Speaker 2: on emerging markets. But Bloomberg's Ruth Carson and Winnie Sue
[10:54] Speaker 2: say there is one area that's flashing caution bonds.
[10:59] Speaker 3: Bonds have flat lined.
[11:02] Speaker 2: Ruth says that's especially concerning because the bond market is
[11:05] Speaker 2: considered to be a strong predictor of downturns and recessions.
[11:09] Speaker 3: So it shows that bond investors are really scratching their
[11:14] Speaker 3: heads that curious conundrum. Why on earth is there such
[11:18] Speaker 3: exuberance in markets when clearly there are two major risks here.
[11:23] Speaker 3: One inflation, so that's bad for bonds, but number two,
[11:28] Speaker 3: which is the harder risk to quantify right now, an actual, real,
[11:34] Speaker 3: huge whacking ball to the global economic growth picture. And
[11:41] Speaker 3: when bon investors grapple with these two, do I sell
[11:44] Speaker 3: bonds because erows the value of what I hold because
[11:47] Speaker 3: of inflation? Or do I buy the heck out of
[11:51] Speaker 3: bonds because it give me safety right now, when I
[11:54] Speaker 3: know in two years or five years or ten years
[11:57] Speaker 3: time the world will still be pay the price of
[12:00] Speaker 3: this disruption? What do you do until bonds move one
[12:06] Speaker 3: way or another. If bonds sell off from here a
[12:08] Speaker 3: lot more, it means hey, everything as well. Stock investors
[12:11] Speaker 3: are right, But if you suddenly see a big drop
[12:16] Speaker 3: in yields, watch out well.
[12:19] Speaker 2: This week is a huge week for rate decisions, right Ruth.
[12:21] Speaker 2: The US Fed, central banks, in Japan, the UK, Canada,
[12:24] Speaker 2: they're all making rate decisions. What might that mean for
[12:28] Speaker 2: the bond market? What are they looking out for?
[12:31] Speaker 3: So everyone that I've spoken with, and also swaps markets
[12:37] Speaker 3: indicate that all the big central banks are going to
[12:43] Speaker 3: keep their rates on whold, So it's kind of boring
[12:45] Speaker 3: in that aspect. So what's really perking their interests right
[12:50] Speaker 3: now is how they signal the risks from the Iran war. Now,
[12:56] Speaker 3: if they turn around and they say, we need to
[12:59] Speaker 3: fight this inflation hit. We are going to at some
[13:04] Speaker 3: point have to raise interest rates or lean that way
[13:07] Speaker 3: to tighten monetary policy, then that is a signal to
[13:11] Speaker 3: sell bonds, at least in the short term. But if
[13:14] Speaker 3: central bangs turn around and they say, we're actually worried. Sure,
[13:20] Speaker 3: there's an inflation shock, but we do worry about our economy.
[13:25] Speaker 3: Our supply only goes that far. We're running out of oil, Okay,
[13:31] Speaker 3: we got to figure out how to bolster our economy.
[13:34] Speaker 3: Then then you will see bonds getting bought, and that's
[13:38] Speaker 3: a clear signal. Remember, bonds always tend to move way
[13:42] Speaker 3: way faster than equities in terms of its harbinger status
[13:48] Speaker 3: of you know, your doom and gloom even.
[13:52] Speaker 2: If this war ends tomorrow. Last week, the Washington Post
[13:56] Speaker 2: reported that the Pentagon had informed Congress that it could
[13:59] Speaker 2: take six months from the end of the war to
[14:02] Speaker 2: fully clear, the straight up homous from minds. I'm wondering
[14:06] Speaker 2: what that kind of extended obstruction could mean for global
[14:10] Speaker 2: oil markets and markets more broadly. Is this something that's
[14:13] Speaker 2: been priced in that kind of potential long term impact?
[14:17] Speaker 1: So at this point I don't think, at least the
[14:20] Speaker 1: equity market hasn't really been pricing in that longer term impact.
[14:24] Speaker 1: And we're seeing more calculations coming through, for sure, and
[14:28] Speaker 1: we're talking about, for example, Germany having already slashed their
[14:32] Speaker 1: economic growth forecast in half, and the IMF also expecting
[14:37] Speaker 1: a lower growth projection due to the war.
[14:41] Speaker 4: So these seem to.
[14:42] Speaker 1: Be factored in in the economic outlook, but a bit
[14:47] Speaker 1: less when it comes to the equity space. But the
[14:50] Speaker 1: risk right now is really further jump in energy prices,
[14:55] Speaker 1: the physical supply shortages, and the demand destruction that is
[15:00] Speaker 1: yet to come.
[15:01] Speaker 2: I mean, the potential for demand destruction does seem elevated.
[15:05] Speaker 2: In April, consumer sentiment in the US hit record lows
[15:09] Speaker 2: despite the stock market's gains that we've been talking about.
[15:13] Speaker 2: For me, it's just another reminder that, as the adage goes,
[15:16] Speaker 2: the stock market is not the economy. But what does
[15:20] Speaker 2: it mean that the confidence levels of Wall Street and
[15:23] Speaker 2: Main Street have diverged so much.
[15:26] Speaker 3: I think a good way to look at this is
[15:28] Speaker 3: as simple as your cost of living. If you know
[15:32] Speaker 3: a war is going on and an unpopular one and
[15:35] Speaker 3: it's showing up in your guests bill and your guess pump,
[15:40] Speaker 3: that is not good for your confidence. How are you
[15:42] Speaker 3: going to bring your kids to school? How are you
[15:44] Speaker 3: going to get to work? You know, things like that.
[15:48] Speaker 3: Way on the US consumer, ironically, there is also this
[15:53] Speaker 3: cycle going on where if consumer confidence is bad, if
[15:59] Speaker 3: the economy is bad, the feed would likely potentially cut
[16:03] Speaker 3: rates at some point. And if you cut rates, that's
[16:06] Speaker 3: actually great for stocks, so.
[16:08] Speaker 5: You kind of go, oh okay, bat news is good news.
[16:12] Speaker 5: Perhaps that's also driving some of that because we know
[16:15] Speaker 5: easy monetary conditions, it's great for equities regardless if you're
[16:19] Speaker 5: in a US or the UK, or Australia or Japan.
[16:23] Speaker 3: So bat news could be good news.
[16:33] Speaker 2: This is the Big Take from Bloomberg News. I'm Sarah Holder.
[16:36] Speaker 2: To get more from the Big Take and unlimited access
[16:39] Speaker 2: to all of Bloomberg dot Com, subscribe today at Bloomberg
[16:43] Speaker 2: dot Com Slash Podcast offer. If you liked this episode,
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[16:53] Speaker 2: Thanks for listening. We'll be back tomorrow

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