The Monthly Review: N.04 2026

The U.S. stock market recently reached new highs despite a tense geopolitical backdrop, driven more by optimistic expectations than confirmed developments. Investors priced in a “Goldilocks” scenario—including easing tensions in the Strait of Hormuz, a potential U.S.–Iran agreement, lower energy prices, and rate cuts—based largely on unverified statements.

When Iran denied these claims and tensions escalated again, the narrative quickly unraveled, exposing how fragile the rally was. This highlights a key lesson: trying to predict markets based on intuition often leads to poor outcomes. Investors who reacted emotionally in recent weeks likely underperformed compared to those who stayed disciplined.

The takeaway is to remain rational, stick to diversified portfolios, and avoid impulsive decisions. With geopolitical negotiations and upcoming Federal Reserve developments in focus, the market outlook remains uncertain and highly sensitive to new information.