The Strait of Hormuz remains a major friction point for global trade, energy prices continue to pose an inflationary threat, and the American consumer is showing signs of fatigue; yet, equity markets have regained ground. As is often the case, the stock market does not wait for problems to be resolved before rebounding. It buys into the hypothesis of their resolution. This mechanism is perfectly rational when based on a credible improvement in outlook. It becomes more fragile when prices already reflect a favorable outcome while the risks themselves have not yet dissipated.
Hormuz: A Shock Whose Effects Do Not Fade Instantly
The Strait of Hormuz is not merely a geopolitical symbol. It is an artery of global energy trade. When it is blocked or disrupted, the consequences quickly transcend the diplomatic sphere. They ripple through oil prices, shipping costs, logistical delays, supply chains, and ultimately, corporate margins.
The often-underestimated factor is duration. A crisis lasting a few days can be absorbed by inventories, financial hedges, or alternative routes. A protracted crisis changes the equation. Delayed cargoes do not reappear on markets immediately. Vessels take several weeks to reach Europe or the United States. Insurers, shipowners, and buyers must reassess risks before returning to normal operations.
Even an announcement of de-escalation would therefore not suffice to instantly restore flows. In the real economy, lead times matter. Oil does not travel at the speed of a diplomatic press release.
This is where recent market behavior raises questions. Investors seem to have already factored in a near-term improvement in the situation. This bet may pay off if normalization occurs quickly. However, the longer the blockage persists, the more the real economy risks reminding markets that logistics has its own inertia.
The US Market Remains Powerful, but Pays Dearly for Perfection
The resilience of US equities rests on a solid argument: large-cap companies in the United States remain exceptionally profitable. S&P 500 net margins are hovering at historically high levels, driven by technology, internationalized revenue streams, economies of scale, and cost discipline.
This profitability partially justifies the valuation premium of the US market. A company capable of growing faster, generating higher margins, and durably defending its positions logically deserves to trade at a higher multiple than a mature, low-growth firm more exposed to the economic cycle.
But the price paid is now demanding. When US indices trade at elevated multiples, it is no longer enough for companies to be solid. They must continue to surprise to the upside. Margins must remain at their peak. Earnings must grow. Big Tech must confirm its trajectory. Above all, the American consumer must not break.
Yet this is precisely one of the points of vulnerability. Consumption represents a major share of the US economy, but it increasingly rests on an unbalanced foundation. Wealthier households continue to support activity thanks to their income, financial assets, and the wealth effect linked to the markets. At the other end of the spectrum, a broader segment of the population is feeling the brunt of inflation, borrowing costs, non-discretionary spending, and rising energy prices.
This two-speed economy does not doom US markets, but it makes their equilibrium more precarious. Major indices increasingly reflect the power of a limited number of globalized corporations, and less and less the average situation of American households.
Artificial Intelligence Supports Margins, but Shifts the Risk
One of the most structural changes lies in the relationship between employment and profit. For a long time, a sustained rise in corporate profits was generally accompanied by an increase in headcount. The current dynamic appears different: some large companies can improve their profitability while reducing their payroll.
Source: TIAA Wealth Management
Artificial intelligence plays a central role here. It does not necessarily replace entire professions overnight, but it already allows for the automation of certain tasks, the acceleration of processes, the reduction of staffing needs in certain functions, and an increase in output per employee.
For companies, the effect is potentially considerable. Lower overheads, higher productivity, and better-defended margins: the mechanism supports earnings. For shareholders, this is a powerful argument in favor of Big Tech, software publishers, semiconductors, and certain industrial groups capable of rapidly integrating these tools.
Source: TIAA Wealth Management
However, this microeconomic gain can become a macroeconomic risk if it generalizes abruptly. A company can improve its margin by reducing its workforce. If many companies do the same at the same time, the issue becomes social, then economic. What happens to demand if job uncertainty increases? What happens to consumption if productivity gains primarily benefit margins and rarely wages? What happens to political stability if profit growth is accompanied by a sense of social decline?
AI can extend the rise in margins, but it does not guarantee balanced growth. It accentuates the polarization between companies that master it and those that are disrupted by it, between employees who gain in productivity and those whose tasks become less necessary, and between stock indices driven by a few champions and the real economy as a whole.
Over the last 15 years, analysts have revised their EPS estimates downward by an average of 2% between January and April, but 2026 is a different story (see chart below).
Oil and Semiconductors: Two Powerful but Concentrated Engines
The positive earnings revisions observed in the United States are not homogeneous. They are largely driven by two segments: energy and semiconductors.
US oil majors benefit from a particularly favorable environment when Middle Eastern tensions support prices and redirect part of the demand toward other producers. They can sell more, at higher prices, in a context where security of supply has once again become a strategic priority.
Semiconductors are benefiting from another dynamic: demand linked to artificial intelligence remains robust, while supply tensions can strengthen pricing power. Chipmakers, equipment manufacturers, and essential suppliers in this value chain find themselves at the center of a global investment cycle.
These two engines explain part of the resilience of US indices. But they also pose a concentration problem. If the improvement in outlook rests on just a few sectors, the market becomes more vulnerable to a targeted disappointment. A correction in semiconductor stocks or a sharp retreat in oil could be enough to weaken the entire index.
The risk is not that these sectors are without a future. On the contrary, their strategic importance is evident. The risk is that the market has already paid for a large part of that future. When a sector advances very rapidly, the question is no longer just whether the story is good. It is whether the price still leaves a margin of safety.
A Justified Rally Is Not Necessarily a Sustainable One
The current sequence cannot be reduced to a simple opposition between optimism and caution. Bullish arguments exist. Large US corporations remain powerful. Margins are high. AI can generate real productivity gains. Tech groups possess exceptional competitive advantages. US energy producers are benefiting from a favorable environment.
But the points of fragility are equally visible. US valuations already price in a great deal of good news. The American consumer is less homogeneous than it appears. The energy shock is not resolved. Market flows have already largely played out the de-escalation scenario. Semiconductors and energy carry a significant portion of positive revisions, which limits the actual depth of the movement.
The real issue is therefore not whether the rebound is explicable. It is. The question is whether it is sustainable.
If the geopolitical situation normalizes quickly, if energy prices recede, if Big Tech confirms its outlook, and if AI investments continue to accelerate, markets could extend their gains. But if the crisis persists, if margins plateau, or if results disappoint, investors will have to revise a scenario that has already been generously priced in.
Markets may have been right to buy peace before it was visible. But the further they move in this direction, the more dependent they become on its realization. This is the inherent fragility of the moment: prices already reflect an improvement, while the real economy is still waiting to see the evidence.
