JPMorgan: Buy the dip amid Iran risks

TL;DR

JPMorgan strategists urge investors to buy stock weakness amid Iran tensions if holding for three months or more.
2026 differs from 2022 with easing inflation, less corporate pricing power, and AI curbing wage growth.
Markets show buying opportunities as U.S. growth hits highs and international stocks offer value discounts.[[1]](https://www.marketwatch.com/story/keep-calm-and-carry-on-buying-the-dip-says-jpmorgan-9eaafd2c)

The story at a glance

JPMorgan strategists, led by Mislav Matejka, advise buying stock dips caused by geopolitical risks in the Strait of Hormuz and Iran war. They contrast the current setup with 2022's tougher conditions. The note comes as markets show oversold signals three weeks into the conflict.[[1]](https://www.marketwatch.com/story/keep-calm-and-carry-on-buying-the-dip-says-jpmorgan-9eaafd2c)

Key points

Any investor with a three-month horizon should buy stock weakness, as escalation faces political, economic, and military limits.
Bearish views are overdone; conviction in buying is growing with early oversold signals.
Unlike 2022, inflation lacks pandemic boosts, corporates have weaker pricing, and AI holds back wages.
Favor long-duration, rate-sensitive assets; pre-crisis trading boosted international, emerging markets, small caps, and value stocks.
S&P 500 EPS forecasts keep rising; U.S. ISM manufacturing at three-year highs; eurozone EPS growth may hit 18.2% this year.
Inflation could rise 1.5 points year-over-year, but central banks likely ignore it without de-anchored expectations.
Bet on international stocks beating U.S. by 11% in second half; emerging markets at 34% discount; MSCI Europe at 14x 2026 earnings vs. S&P 500's 19.5x.[[1]](https://www.marketwatch.com/story/keep-calm-and-carry-on-buying-the-dip-says-jpmorgan-9eaafd2c)

Details and context

Geopolitical risks keep markets jumpy, especially with possible Strait of Hormuz flare-ups, but JPMorgan sees constraints on worse outcomes. Positive surprises like the Citigroup Economic Surprises Index support resilience. Trading patterns before the Iranian crisis already leaned toward non-U.S. assets, set to resume as tensions ease.[[1]](https://www.marketwatch.com/story/keep-calm-and-carry-on-buying-the-dip-says-jpmorgan-9eaafd2c)

This differs from 2022 bear markets tied to post-pandemic inflation spikes. Now, fundamentals like broadening EPS and steady growth point to upside. Valuation gaps make international and emerging markets attractive relative to pricey U.S. large caps.[[1]](https://www.marketwatch.com/story/keep-calm-and-carry-on-buying-the-dip-says-jpmorgan-9eaafd2c)

Key quotes

“Inflation expectations are unlikely to de-anchor.”

— Mislav Matejka, head of European strategy at JPMorgan[[1]](https://www.marketwatch.com/story/keep-calm-and-carry-on-buying-the-dip-says-jpmorgan-9eaafd2c)

Why it matters

Geopolitical shocks test market nerves, but sound advice like JPMorgan's can steady long-term portfolios amid short-term volatility. Investors with time horizons over three months gain from dips in undervalued international and emerging assets versus U.S. stocks. Watch Strait of Hormuz developments and central bank reactions to inflation, though escalation risks remain contained.

LANG: en