Remember: Geopolitical conflict only matters for equities if investors — as distinct from traders — can draw something like a straight line to corporate profits.

In the case of the Iran war, there is such a line: A sustained energy price shock could sap disposable income, divert consumer spending and undercut sales for non-energy companies.

“Sustained” is the operative word. Forthcoming manifestations of the “damage is done” dynamic notwithstanding (you don’t just cut off a fifth of the world’s oil supply for six weeks with no consequences), a long-term investor will be forgiven for suggesting this too shall pass even if, for now, a lot of ships won’t (pass).

The rebound from the March 30 lows for US shares is in no small part a function of mechanical flows off the back of ceasefire headlines, but there’s a “fundamental underpinning,” as Goldman’s Ben Snider put it, in his latest.

The figure on the left, below, shows you the extent to which consensus estimates for S&P 500 EPS never wavered during the conflict, and in fact moved higher throughout.

The figure on the right shows you the read-across for valuations. Although stocks ended last week at records, they’re actually cheaper on a forward multiple than they were in late January.

“Since the start of the war, consensus estimates for S&P 500 EPS in 2026 and 2027 have each risen by 3%,” Snider wrote. “As a result, while the S&P 500 ended the week 2% above its pre-war January high, the current P/E multiple of 21x is 5% lower than it was in January.”

There are (at least) two problems. First, and most obviously, estimates are just that: Estimates. There’s no guarantee consensus will pan out, so when we say stocks are “cheaper on a forward multiple than they were two and half months ago,” what we’re actually saying is “stocks are cheaper assuming analysts’ estimates are borne out.”

Second, and as Snider was keen to point out, positive revisions are concentrated “almost entirely” in just two sectors. You’ll never guess what they are.

I’m just joking. Obviously, they’re Energy and Tech. Energy due to what Snider euphemistically described as “the typical redistributional impact” of oil price shocks. And Tech because of “the powerful idiosyncratic tailwind from AI investment spending.”

There’s the breakdown. It’s, um, not exactly comforting if you’re the type who’s inclined to fret about narrow markets, concentration and the like.

The situation’s even dicier when you drill down (no oil pun intended). As Snider went on to note, “Micron alone has accounted for over half of the revision [and] consensus estimates have been roughly unchanged for the median S&P 500 stock.”

Throw in Exxon and Chevron and you’re up to 75% of the overall upward revision to S&P index earnings. Toss Broadcom and Conoco into the mix and you’re at 90%. So, nine cents out of every dime of projected 2026 EPS upside versus pre-war bottom-up consensus is attributable to Micron, Exxon, Chevron, Broadcom and Conoco.

So, the “good” news (if you can call it that) is that the projected earnings fillip from the war for Energy stocks, when combined with the still potent AI narrative, has proven more than sufficient to prop up forward EPS estimates. The caveats say those are just estimates, and the furthest thing from broadly distributed.

Put differently, if someone asks you whether the rally’s justified by the fundamentals, you could say: “Yes, but don’t read the fine print.”