Strong corporate earnings and investor skepticism keep markets from collapsing during Middle East crisis
RA
Riley Ashworth
Fidelity Investments · Apr 12, 2026
The S&P 500 has recovered from a 9% drawdown to approximately 1% as strong corporate earnings and contained credit spreads signal limited systemic stress. This resilience follows a two-week ceasefire announced by US President Donald Trump with Iran, which caused oil prices to plunge more than 17% before WTI crude oil prices stabilized around $100 per barrel.
Crude oil futures remain in backwardation, with contracts further out trading roughly $40 below the front month. This structure indicates that traders view the current supply disruptions as short-term bottlenecks rather than a prolonged crisis. Fidelity Investments director of global macro Jurrien Timmer notes that investors have developed a more measured response to geopolitical shocks, supported by a mid-cycle economic expansion and a rollback of tariffs by the US Supreme Court.
Market stability is further supported by investor skepticism regarding AI and software valuations. Timmer argues that the continued scrutiny of these valuations has prevented the market from overshooting into a speculative bubble. In the crypto market, Bitcoin has found support at the $65,000 level after absorbing selling pressure from less committed investors.
Risks remain tied to the 10-year US Treasury yield, which is approaching 4.5% and could move toward 5%.
Fidelity Investments
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