BlackRock raises view on U.S. stocks on belief that war is over, profits are up
A sign hangs on the exterior of a BlackRock office in San Francisco, California, on January 15, 2026.
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Asset management giant BlackRock raised its outlook for US stocks on the grounds that containing the effects of the Iran war and strong corporate earnings will create a positive backdrop for domestic stocks.
The firm, which manages $14 trillion for clients, said in its weekly market note that it had raised the rating one notch from neutral to overweight.
Developments in the war caused BlackRock to be cautious about domestic stocks. However, he stated that the possibility of a permanent ceasefire now makes strategists believe that the effects will not be great.
“After reducing risk a few weeks ago, we see two signs that will lead us to increase risk again. First, concrete evidence of actions to reopen flows in the Strait of Hormuz. Second, visibility on containing the ongoing macro impact,” the firm said. “This comes as corporate earnings expectations rise for both the U.S. [emerging markets] “For 2026, even since February 28, when the conflict began.”
Moreover, BlackRock strategists said that “the threshold for the United States and Iran to return to war is high,” further limiting the potential damage.
At the same time, corporate profit prospects look bright.
With earnings season just beginning, S&P 500 Companies are collectively expected to post 12.6% profit growth in the first quarter, according to FactSet. The forecast firm said this rate would rise to 19% if historical strike rates continue.
Moreover, tech profits are expected to increase by 45% this year, but the sector has only seen a marginal gain this year.
That puts information technology valuations against 10 other S&P 500 sectors at their lowest level since mid-2020, BlackRock said.
“We have increased risk again in the US and emerging markets due to strong corporate profit expectations and limited damage to global growth,” the strategists said. “We’re focusing on margins this first quarter U.S. earnings season and still favoring thematic opportunities like defense.”
These two regions are the only regions where BlackRock is overweight in its equity portfolio.
