BlackRock Strategists Resume Overweight Stance on U.S. Stocks Amid Middle East Conflict

BlackRock strategists have reinstated their overweight position on U.S. stocks, citing the manageable impact of the Middle East conflict on global economic growth. According to Jin10, the team, led by Jean Boivin from the BlackRock Investment Institute, had previously adopted a neutral stance due to escalating tensions in the region. In a report released on Monday, they noted that they have been monitoring two key signals indicating increased risk exposure: the resumption of shipping through the Strait of Hormuz and signs that the war's economic impact is limited. They stated, "We have seen progress in both areas," emphasizing the importance of the recent ceasefire and the high threshold for returning to conflict. BlackRock also highlighted the upcoming earnings season, noting that corporate profit expectations have risen even during the conflict, partly driven by AI themes. Regarding U.S. stocks, BlackRock remarked, "The impact of the Middle East conflict on global growth is controllable, coupled with strong earnings expectations—especially in the tech sector—allowing us to maintain our risk appetite."