Since the start of 2026, Iran's stock market has been experiencing a rare surge. On September 30, the benchmark TEDPIX index of the Tehran Stock Exchange rose 171,586 points, or 2.26%, to close at 7,766,538 points, setting a new all-time high and crossing the 7.7 million mark for the first time. About 83% of listed securities ended the day higher.

Taking a longer view, this rally is even more striking. On December 31, 2025, the last trading day before the start of 2026, the TEDPIX closed at 4,070,065 points; by September 30, the index had climbed to 7,766,538 points, a cumulative gain of about 90.8% so far this year.

Even on a global scale, this gain is remarkable: as of September 30, South Korea's KOSPI index, which has performed strongly this year, was up about 60%, while Japan's Nikkei 225 was up about 32.6%; the U.S. Nasdaq Composite was up about 15.3% as of September 29, and Europe's STOXX 50 was up about 9.7% intraday as of September 30. In other words, even compared with some of the world's best-performing major stock indices this year, the TEDPIX's gain of nearly 91% is still clearly higher.

However, for Iran, which is mired in conflict, a 90.8% index gain cannot be directly equated with 90.8% growth in wealth. This year, Iran has simultaneously experienced high inflation and a sharp depreciation of the rial. If measured separately in terms of domestic purchasing power and U.S. dollar purchasing power, this near-doubling stock market rally produces vastly different results.

Has Iran's stock market beaten inflation?

First, the most central question: has Iran's stock market beaten inflation? The answer is yes, and by no small margin. For domestic Iranian investors who mainly earn income, hold assets and make daily purchases in rials, the most direct benchmark for judging whether a stock investment has truly grown in value is not the dollar exchange rate, but domestic prices. The reason is simple. If an investor held 1 million rials at the start of the year and increased those assets to 1.9 million rials by year-end through stock investments, but the prices of domestic goods and services also rose 90% over the same period, then the investment has not actually added much real purchasing power. Therefore, judging the real return of Iran's stock market requires comparing the TEDPIX's nominal gain with the rise in consumer prices over the same period.

Data from Iran's central bank show that in Dey 1404, the month covering late December 2025 to late January 2026, the urban consumer price index stood at 514.6. After the conflict broke out, Iranian inflation continued to rise rapidly, with the CPI reaching 770.3 by August; the monthly inflation rate in September further reached 3.9%. If we estimate that the September price index was about 800.3 based on the August CPI of 770.3 plus a further 3.9% increase, and use 514.6 as the baseline price level near the start of the year, then Iran's urban consumer prices have risen cumulatively this year by approximately that amount. Over the same period, the TEDPIX rose about 90.8%. This means the stock market's gain clearly outpaced the overall pace of price increases. The real return after deducting inflation was about that level. In other words, an Iranian investor who bought assets broadly tracking the TEDPIX at the start of the year still saw real purchasing power increase by about 23%, even after accounting for this year's extremely high inflation. From this perspective, Iran's stock market this year is not merely creating a "nominal record high." It has indeed beaten inflation. This is also the most important conclusion when judging whether this rally has truly created wealth for domestic Iranian investors.

What happened when measured in U.S. dollars?

But if this asset is converted into U.S. dollars, how much has it actually appreciated? Here the answer becomes completely different. For domestic Iranian investors, the exchange rate is not the first standard for measuring real returns; but for foreign investors, those who need to send funds out of Iran, or those who wish to measure their wealth in U.S. dollars, exchange-rate changes become crucial. Iran has long had a multiple exchange-rate system, so if one wants to measure the real cost for ordinary investors to actually exchange into U.S. dollars, the more appropriate reference is the free-market rate, not the official or controlled rate.

Around December 31, 2025, one U.S. dollar traded for about 135,000 to 138,000 tomans in the free market. By September 30, that price had risen to about 254,500 tomans. In other words, the number of tomans needed to buy one U.S. dollar nearly doubled. If the 135,000 tomans at the start of the year is used as the baseline, the dollar rose about 88% against the toman. It should be noted that this is not equal to "the rial depreciating by 88%." In terms of the rial's own value, its purchasing power against the dollar fell by about that amount. To truly judge how much a stock asset earned after being converted into U.S. dollars, one also cannot simply subtract the 47% currency depreciation from the 90.8% stock market gain. The correct method is to convert the asset into U.S. dollars using the exchange rates at the two respective points in time. Based on the TEDPIX at about 4,070,065 points and the dollar at about 135,000 tomans at the start of the year, and the TEDPIX at about 7,766,538 points and the dollar at about 254,500 tomans on September 30. Even using another free-market quote of 137,700 tomans at the start of the year, the dollar-denominated return would still be only about 4%. That is to say, if an investor had exchanged U.S. dollars into rials at the start of the year, bought assets tracking the TEDPIX, and converted them back into U.S. dollars at the end of September, then after a stock market gain of nearly 91%, the final dollar return might be only a few percentage points. This is completely different from the visual impression of an index that has nearly doubled. From a dollar perspective, the vast majority of the gains in this rally were offset by the depreciation of the rial.

So the most noteworthy aspect of Iran's stock market this year is not simply that it "rose 90%." What is truly noteworthy is that it simultaneously reveals two very different worlds of wealth in a high-inflation economy. In the world of the rial, the stock market beat prices, and investors achieved real growth in purchasing power. But in the world of the U.S. dollar, most of this historic bull market's gains were merely used to offset the rapid shrinkage in the value of the local currency. The 7.7 million mark is indeed a real all-time high. But it is also an all-time high denominated in a rapidly depreciating currency.