The Tuesday session on the New York floor clearly reminded that geopolitical reality reaches even the most optimistic results of big techs.
Geopolitical Checkmate and Bearish Sentiment Despite Profits
On April 21, the session started with modest gains in the S&P 500, but the final bells clearly pointed to a capitulation of bulls.
The index ultimately lost 0,65% at Tuesday’s close, ending at 7 064 points.
Chart. S&P 500 index price
Source: TradingView
The Dow Jones Industrial Average fell by 0,59% to 49 149 points.
Chart. Dow Jones Industrial Average index price
Source: TradingView
The Nasdaq Composite index fell by 0,59% to 24 259 points.
Sudden change in sentiment, despite very positive corporate results, was caused by further disruptions on the Washington‑Tehran line.
Investors who had been buying shares in hopes of peace were brought back to the floor by the news that U.S. Vice‑President J.D Vance would not travel to Pakistan, where key negotiations were to take place.
Iran declared readiness for dialogue, on the condition that the U.S. abandon its brutal pressure policy.
Tehran maintains that negotiations aimed at the country’s capitulation simply do not enter the game.
As Thomas Martin of GLOBALT Investments noted, ignoring the war risk in Iran over the past days was downright astonishing.
Geopolitics is a “wild card” that cannot be captured in a DCF model. Although Donald Trump admitted extending the truce, and Iran confirms its presence in Islamabad for further negotiations, this information surfaced only after the Wall Street close.
Chart. Nasdaq Composite index price
Source: TradingView
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Armored Big Tech Pumps Capital into AI Architecture
The red on the charts did not prevent the largest U.S. corporations from recording further satisfying profits. The biggest fuel for investors’ imagination remains artificial intelligence.
A great example is that JP Morgan raised its forecast for the S&P 500 index by year‑end, suggesting that the “AI revolution” drives real tech sector profits.
It’s hard to disagree, seeing more giants pumping billions into AI.
One such example is Amazon, which announced an investment of about 25 billion USD in the startup Anthropic (creator of the Claude chatbot).
This is a clear signal that market giants do not intend to skimp on the AI arms race. Importantly, shares of Jeff Bezos company, one of the few, were supported by a sell‑off, rising by 0,66%.
The unexpected star of the day was UnitedHealth. The health‑care industry’s hegemon shares jumped by 7% after raising annual forecasts. Thus the company saved Dow Jones from deeper plunges.
The Tuesday session on Wall Street ended in a bloody red, but Wednesday, April 22, looks rather optimistic, especially considering calming reports of a return to peace talks between Washington and Tehran.
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