What’s Next in Iran and Markets? – April 10, 2026

Dear Valued Clients and Friends,

In this week’s Dividend Cafe:

• We look at what transpired this week in markets and in Iranian news that matters for investors.
• We look at all the questions that are not yet answered but are going to need to be answered.
• And we offer a perspective on how investors can best think about the current probabilities of outcomes to make decisions that make sense for their portfolios.

Let’s jump into the Dividend Cafe …

Download Podcast Transcript

What Happened this Week?

On Sunday, we were told that some form of civilization-ending escalation was coming in the Iran operation.  Futures barely moved; markets opened totally flat on Monday and actually closed up by over +150 points.  Markets dropped 400 points for a few hours on Tuesday before coming back to “barely down” as the rhetoric reached a fever pitch, oil moved to well over $110/barrel, and a deadline loomed that was supposed to wipe Iran off the map.  By that evening, a sort of cease-fire was announced, and on Wednesday, markets rallied dramatically (up over 1,000 points on the Dow).  The rally extended a bit more on Thursday.  As I write, Friday morning market futures are flat.

As of press time – and I assure you that it is a dangerous thing to say because I know that things can, and probably will, substantively change in an hour’s time, let alone overnight, etc. – the ceasefire that was announced Tuesday night appears to be holding, but with mysteriously different understandings of what has actually been agreed to.  Even beyond the alleged Lebanon issue (i.e. Iran’s claim that Israel was supposed to stop efforts against Hezbollah in Lebanon as part of the cease-fire and the U.S./Israel claim that Lebanon was never a part of this), the rather substantive public disagreement over who is to control the Strait of Hormuz and how, and what Iran is to do with its uranium stockpile, seem like, ummmm, big issues to get clarified??

What we understand to be the case now (subject to change in the next thirty seconds, thirty minutes, thirty hours, or one post on Truth Social) is that talks with the U.S. delegation begin in Islamabad on Saturday, and that Vice President J.D. Vance has been deputized to lead the talks (alongside special envoy, Steve Witkoff, and the President’s son-in-law, Jared Kushner).

The Strait of Hormuz has not seen a pick-up in activity, sitting below 10% of its pre-war levels.  Oil has not gone back to $110 or higher, but it has “settled” at $98 – not exactly a comforting level anticipating immediate Hormuz re-opening.  Of course, that $98 could see $88 in a second if the right headline surfaced.

Of all the beef the President has with NATO, his meeting Thursday with NATO Secretary-General Mark Rutte was almost entirely focused on the President’s anger that European allies in NATO have not made commitments to assist with the Strait of Hormuz.  I am sure the NATO conversation will continue to be a big one in a lot of ways for a lot of reasons for a lot of months, but right now, even the U.S.-NATO matter is mostly about Hormuz.

So we head into the weekend with real uncertainty about the prospects for success in the discussion, a lack of clarity about what has been agreed to temporarily, and differing opinions about the likelihood of reaching a more sustainable agreement.

A Major Challenge in Assessing Things

One of the problems in trying to use the news as a vehicle for determining where things stand in this whole situation (and out of that determination, formulating a perspective on what market impact is likely to be) is that there is almost a perfectly equal agenda from two different directions distorting the “determination of where things stand in this whole situation.”  Objectively, one can easily assess that the whole thing is not done, there is a lot of wood to chop, and as things stand now, the Strait of Hormuz remains a vulnerability.  And objectively, one can easily assess that the Iranian military and leadership are massively decapitated, tremendous progress has been made in the underlying mission, and heavy leverage exists to move this to a point of potential finality.  In neither case have I said this is all a big disaster, or that it is “mission accomplished.”   But I find it nearly impossible to find public commentary that is not marinated with either TDS defeatism or Trump deification – in both cases, poisoning the attempt to formulate an objective assessment of where things stand.

It is not criticizing where things are or even predicting a negative outcome as to where they will go, but to point out that a lot of unanswered questions remain.

And it is not sycophantic or delusional rose-colored glasses to point out that many elements of this operation have been an overwhelming success.

For our purposes in the Dividend Cafe, we are merely trying to assess where things are, where the probabilities lie as to where they may go, and what conclusions we should draw as investors.  That’s it.  That other agendas in assessment exist is what it is, but investors must not be lured into the bi-directional tribal propaganda of our day.

What Are the Questions We Do Not Yet Have Answers To?

Taken from one of the greatest political journalists of our era, Mark Halperin, I think this list is a pretty good summary of what we do not know at this time:

• What happens after the two-week ceasefire?
• Is this a pause or a real peace?
• Who will be present at any face-to-face negotiations?
• Who enforces compliance on both sides?
• What are the exact ceasefire terms?
• Will Iran fully reopen Hormuz?
• Who controls Strait of Hormuz security?
• Are transit fees actually agreed?
• What happens if violations occur — or attacks?
• Are proxy groups included or excluded?
• Does the ceasefire cover the Israel-Hezbollah conflict?
• What’s the fate of Iran’s nuclear program?
• Are sanctions being lifted or not?
• What is the timeline for sanctions relief, if any?
• Will the U.S. withdraw regional forces?
• What happens to Iran’s frozen assets?
• Are missile programs on the table?
• Who verifies nuclear compliance?
• Is there a binding international agreement?
• Can negotiations realistically succeed?
• Is Israel in lockstep with the U.S.?
• Who controls Iran now?
• What happens to efforts at regime change?
• What in the Iranian plan that Donald Trump has seemed to both denounce and accept is actually on the table?

I am sure a handful of other questions can be included, but I think this list is effective at establishing a very important point for investors thinking through this in a short-term way (which is the wrong way): There remain many substantial unknowns.

What Is Most Likely to Happen Out of This Cease‑Fire Moment?

I don’t have the foggiest idea, and neither does anyone else – especially those who tell you they do.  Here is what I do know or believe that is relevant to us as investors:

1. I will be very surprised if there are not zigs and zags along the way, spurts and starts, false alarms and false hopes, as this all plays out.  That would seem likely to create certain days of exacerbated market volatility in the adventure ahead (oil prices, stock prices, and bond yields).
2. It is unambiguously clear to me that the President wants this to be over and will make concessions to get it over.  There is no certainty of this happening imminently, but it is the base case position – that one way or the other, the President seeks to have this be done, and to be able to claim victory.  This aligns with my own views (and I think everyone else’s???) of his pathology, and it is consistent with his naming JD Vance as the lead negotiator.  The Vice President was the most vocal opponent in the administration leading up to the operation, and is now tasked with leading negotiations to end it.  You can draw your own conclusions.
3. I am confident that when some victory is declared, there will be some who say it was inadequate.  There is even a chance they will be right.  But even if they were not right, there will be those who say we did not get what we are after.  From a market standpoint, the major question will be the fate of the Strait of Hormuz.  From a missional standpoint, the major questions (plural) will be the fate of the Strait of Hormuz, the fate of Iran’s nuclear program, and the fate of its uranium stockpiles.  I will be shocked if this ends in a way where an unambiguous victory gets declared across all facets and considerations, but I also think that the MARKET standard for success, and especially closure, is lower than the missional one.

How Can Market Participants Think About All of This?

What you see get teased out when markets sell off on concerns that the war matter is about to escalate, or see the market dramatically rally on mere chatter of a cease-fire, or the hope of some Hormuz progress, is where the short-term traders and levered bettors sit.  That particular market movement in minutes and hours is not substantive – it is speculative, it is fast, it is leveraged, and it is silly.  The one-day move with a bad Iran headline and the one-day move with a good Iran headline tell us nothing other than this: People are positioned a certain way, have to undo positions if something moves against them, and do so quickly.  It reminds me of the substantial market moves that take place much of the time in the first 45 minutes after a Fed press conference – never has it proven to be sustainably accurate or even directionally telling – it is pure speculation being quickly unwound – those betting on how others are betting.  Don’t be a sucker.

Here is perhaps the most important thing to consider about the Iran matter, regardless of where it goes, when it ends, and how it ends:

What do we think about markets, strategy, and a coherent portfolio if we were back to a pre-Iran place geopolitically?  In other words, assuming this all ends one way or the other in some reasonably soon time frame, do we really believe that our portfolios should look different from what they do now?  If so, why?  If not, why concern ourselves with the particulars of how this Iran matter plays out (from an investor standpoint, that is)?

On the Other Side

I would suggest the following, fallible as these claims may be, for investors to think about when it comes to “investing on the other side of this Iran operation” …

1. First of all, the Iran operation may not be over in two weeks, but it is unlikely to be two years, either.  Through the aforementioned zigs and zags I expect out of these negotiation talks, and the real possibility of some more escalation before it does end, it is going to end, the President’s bias is to end it and claim victory, and some version of outcome in the middle of the barbell is most likely.
2. But whether this starts to subside in April or June, it seems unlikely that oil prices will come down to $65 any time soon.  We may avoid hitting $150 (the White House certainly wants to), and it may not hold around $100 for long, but “settling” in the $75-85 range is all at once much better than what we have now (as an input cost to the U.S. economy), and much higher than it was for most of the last couple of years.
3. Before there was Iran, there was an ambiguous economic state of affairs.  There still is.  See: Labor markets, capital spending, real GDP growth, manufacturing, and financial conditions.  None is terrible. None is great.  All are ambiguous at this time.
4. Corporate profits growing in double digits this year is baked into market expectations, and for good reason (I see no reason to believe it will be wrong).  But what could be a catalyst for that to matter for markets when it was already baked in?  The answer is either a shockingly dovish Fed action between now and the end of the year, or a shockingly positive turn for the whole economy (the latter would undermine the case for the former).  Muted market returns for broad index investors are likely a base case.
5. The AI story got out of the front page because of Iran, but it didn’t land on p. 8 (like the Fed and interest rates did).  AI, data center, capex, and the fundamental assumptions in the whole AI investment story, remain p. 2 – and ready to re-take p. 1 on the other side of Iran.

Conclusion

It strikes me as unspeakably silly to have an investment strategy right now that is categorically different than the one you had before the Iran operation began, unless you had a terrible investment strategy before.  The things I believed at the beginning of the year, I still believe now (rotation not correction, energy was too low-priced, housing activity will pick up as prices inevitably come down, defensives and under-appreciated values in the market would benefit from rotation) – with some of those things being temporary beneficiaries of cyclical circumstances.  I believe you can add what has become more opportunistic this year to that mix (especially in Financials), but timing that could be a frustrating thing for people who care about such things.

But if one is frustrated by timing, I believe they will find themselves frustrated by many things in 2026 and beyond.  Same as it ever was.

Chart of the Week

Another thing I feel comfortable predicting: Once the Iran news is no longer driving market news every day, discussion of the Fed and interest rates will re-take pole position on that front …

Quote of the Week

“The stock market will do whatever it has to do to embarrass the greatest number of people to the greatest extent possible.”
~ Walter Deemer

* * *
We are unbelievably blessed by the initial launches of our two new offices this year (Silicon Valley in California and Pittsburgh as of two weeks ago).  It has been an extraordinarily busy year for us in markets, and a busy year in all we are doing inside the business.  Markets never sleep, though, and we wouldn’t have it any other way.

Enjoy a little golf this weekend, and reach out with any questions, any time.  I do not know where things go next in Iran, but I do know that dividends are growing in our portfolio.  An investment plan focused on what is uncontrollable is unwise.  One focused on what is real is the end to which we work.

With regards,

David L. Bahnsen
Chief Investment Officer, Managing Partner

The Bahnsen Group
thebahnsengroup.com

This week’s Dividend Cafe features research from S&P, Baird, Barclays, Goldman Sachs, and the IRN research platform of FactSet