A Wartime Rally Explained

WSJ analysis explains why markets have rallied despite a Mideast war: optimism around the start of Q1 earnings season, analysts’ still-strong profit forecasts and trend-following funds buying into momentum. The three major U.S. indexes have recovered to prewar levels, with the tech sector’s “Magnificent 7” adding about $2.5 trillion in market value over an eight-day stretch. The piece frames the move as sentiment-driven—cheap shares, upbeat earnings expectations and systematic flows outweigh geopolitical uncertainty—supporting higher risk assets while keeping markets sensitive to news flow.