President Donald Trump has voiced his astonishment at the market’s resilience amid the ongoing war with Iran, contrary to his expectations of a significant downturn.
At the Small Business Summit on Monday, Trump said that he had assumed a 25% market slump as a result of the conflict with Tehran. He rationalized that the decline would have been “worth it” to counteract the risk of a nuclear-armed Iran.
Trump stressed that the Iranian regime should have been toppled “47 years ago”, a task that should have been executed by “many presidents or other countries.” Despite the war, he underscored that markets are hitting “new highs.”
Trump Stunned By Market Strength
Trump’s surprise at the market’s resilience echoes his comments to CNBC last month. He stated, “If you would have told me that the Dow is almost at 50,000, I’m looking at your screen right now, and that oil is at 90 instead of 200, I would have been frankly surprised.”
He further noted the adaptability of the market, saying, “When there are problems, people figure out how to take care of things.” Despite his initial belief that the Dow would be down by “20%,” the current numbers have proven otherwise, said Trump.
Markets Shrug Shock, Risks Linger
Amid a historic energy shock and disruptions in the Strait of Hormuz, U.S. markets remain strong, with the S&P 500 hitting records. Over the past month, SPDR S&P 500 ETF (NYSE:SPY), which tracks the index, surged 8.97%. This indicates that the market is not ignorant, but pricing in the shock instead.
The resilience can also be largely attributed to the One Big Beautiful Bill Act, which effectively acts as a stimulus. While it cut taxes by an estimated $129 billion, unchanged IRS withholding meant workers overpaid throughout the year and are now receiving large refunds just as fuel costs spike, cushioning the impact on consumers and supporting market confidence.
Meanwhile, Ryan Detrick, Chief Market Strategist of Carson Group, told Benzinga that he remains bullish on markets in 2026 despite geopolitical tensions, arguing that volatility and negative headlines are normal. He pointed to historical trends and data, noting that market pullbacks and corrections are typical features of most years.
On the other hand, investor Paul Tudor Jones warned that the U.S. economy is increasingly dependent on stock market valuations, now at 252% of GDP. He cautions that a return to historical price-to-earnings levels could trigger a 30–35% market crash, wiping out capital gains tax revenues and potentially leading to a wider budget deficit and stress in the bond market.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
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