On February 28th, the United States launched Operation “Epic Fury” against Iran, leading to an 8% decline in the S&P 500 Index and a 50% rise in crude oil prices. However, stocks rebounded on Tuesday following a statement from Iranian President Pezeshkian indicating Iran’s willingness to end the conflict if provided with security guarantees.
Currently, investor sentiment is notably bearish, with the AAII Sentiment Index showing more bears than bulls for six consecutive weeks. The ETF put/call ratio’s 21-day moving average has surpassed levels seen during the 2025 Tariff Tantrum, indicating increased demand for protection among investors.
Despite recent downturns, companies in the AI sector like Micron Technology (MU) and NVIDIA (NVDA) continue to exhibit strong fundamentals, with Micron exceeding earnings estimates by 38.64% last quarter. Analysts suggest that this volatility may serve as a necessary adjustment period before the market can make a sustained recovery.
