Iran stock market dip has Yardeni and Lee calling buy
Ed Yardeni and Tom Lee say U.S. stocks have overreacted as the Iran war lifts oil and drags the S&P 500 below a key average.
By Sal Moretti · Money Reporter
3 min read
The Iran stock market dip is starting to look like a buy signal to two well-known Wall Street voices, even as oil flirts with $100 a barrel and U.S. equities wobble under fresh geopolitical strain.
MarketWatch reported that Ed Yardeni, economist and president of Yardeni Research, and Tom Lee, head of research at Fundstrat, both told clients Thursday that the latest pullback in U.S. stocks has created a chance to buy rather than run for cover.
The market pressure came as the war in Iran intensified. MarketWatch reported that the U.S. had completed its 13th night of attacks against Iran as of Friday, while President Donald Trump told Axios on Thursday that he was considering a “massive attack” on Iran.
Oil prices moved close to $100 a barrel during the turmoil, according to MarketWatch. The S&P 500 fell 1.2% in Thursday’s session, slipping slightly below its 50-day moving average. Futures tied to the index pointed to a modest bounce Friday as oil prices eased.
Is the Iran stock market dip a buying opportunity?
Yardeni told clients that geopolitical shocks have often turned into chances to buy stocks, and said the current episode should follow that pattern. He said investors buying the dip are effectively wagering that either Washington or Tehran will take steps to end the conflict.
Yardeni Research also recommended raising exposure to energy stocks as protection if the Iran war lasts longer than expected. The firm noted that energy shares held up during a temporary ceasefire and have been rising alongside crude prices.
The Vanguard Energy exchange-traded fund is up 19% since the conflict in the Middle East began, according to MarketWatch. Yardeni also pointed investors toward financial services, healthcare and industrial stocks.
What is pushing stocks lower?
Lee told Fundstrat clients that stocks were reacting to two hits at once: renewed strikes in Iran and disappointment around early results from major technology companies. In his view, equity markets were overreacting to both.
The so-called Magnificent Seven, Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla, suffered a combined one-day market-capitalization drop of $889.3 billion Thursday, according to Dow Jones Market Data. MarketWatch reported that it was their largest such decline since the week of the “Liberation Day” tariffs in April of last year.
Those losses followed announcements from Alphabet and Tesla about plans for large increases in capital spending, according to MarketWatch. Tesla shares were down 14.52%, Alphabet fell 7.13%, Amazon lost 4.57%, Meta dropped 3.36%, Microsoft declined 2.24%, Nvidia slipped 1.56% and Apple fell 1.30%.
Lee said conflict-driven selloffs tend to arrive fast because markets hate uncertainty. Fundstrat found that the S&P 500 dropped 10% during the first wave of U.S.-led strikes against Iran earlier in the year before staging a sharp V-shaped rebound.
Lee also argued that the U.S., as a major oil producer, is likely to fare better economically from the war than many other countries. He told investors he would not cut risk exposure solely because war risks are rising.
This story draws on original reporting from MarketWatch.