Strategists at JPMorgan Chase suggest that long-term investors should capitalize on stock market declines triggered by geopolitical events to buy at lower prices. They indicated that although short-term market volatility is expected to persist, a significant escalation of tensions is unlikely to be sustained.

A team led by Mislav Matejka stated that historical data shows stock markets have demonstrated resilience to oil shocks. Following previous sharp increases in crude oil prices, the S&P 500 index delivered positive returns over both six-month and twelve-month periods.

The bank believes the current macroeconomic environment is fundamentally different from that of 2022 and reiterated its recommendation to increase holdings in long-duration assets, regardless of how subsequent conflicts evolve.

The team noted that while investor sentiment was initially relatively positive following the outbreak of conflict, market mood has since turned bearish, with positions continuing to be de-risked. As prices have begun to factor in worst-case scenarios, the market is showing signs of being oversold.

JPMorgan expressed the view that markets are likely to revert to their pre-conflict trading patterns. As safe-haven demand for the US dollar diminishes, international and emerging market equities are expected to outperform the US market.

The bank also emphasized that earnings expectations continue to be revised upwards, and this trend is anticipated to persist against a backdrop of an overall favorable macroeconomic environment.