BlackRock strategists have reinstated their overweight view on U.S. equities, believing the impact of the Middle East conflict on global economic growth "may be contained." After downgrading their risk appetite to neutral several weeks ago due to escalating Middle East tensions, a team of strategists led by Jean Boivin, head of BlackRock's Investment Institute, said in a report on Monday that they have been watching "two signals that increase risk exposure," including 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," adding that a near-term ceasefire is "crucial" and the threshold for a return to war is "high." BlackRock also highlighted the upcoming earnings season. "Even during the conflict, corporate earnings expectations have continued to rise, partly thanks to the artificial intelligence theme." Regarding U.S. equities, BlackRock stated, "The manageable impact of the Middle East conflict on global growth, coupled with strong earnings expectations—particularly in the technology sector—maintains our risk appetite."