MW The market's Iran war wobble has left world-beating U.S. stocks 'extremely cheap,' says Bill Ackman

By Jamie Chisholm

Billionaire hedge fund manager is upbeat on how Iran conflict will work out for U.S.

The valuations of some of Wall Street's best stocks are too low, analysts and a hedge fund manager argue.

The U.S. and Israel war with Iran has entered its fifth week. The S&P 500 is down five weeks in a row, it's worst run since August, having shed 8.7% since the record close hit in January.

Sometimes it's hard to work out what is moving markets, but this is not one of those times. As oil prices spike, the Middle East war has badly hit investor confidence that was already being shaken by concerns about the spending relating to, and the disruption caused by, artificial intelligence.

But some investors think the pessimism is overdone. In a post on X over the weekend, hedge-fund billionaire Bill Ackman said investors should "ignore the bears."

"Some of the highest quality businesses in the world are trading at extremely cheap prices," said the CEO of Pershing Square. "Ignore the MSM [mainstream media]. One of the most one-sided wars in history that will end well for the U.S. and the world. And we have the potential for a large peace dividend."

He added that it is now "one of the best times in a long time to buy quality."

It should be noted that Ackman is generally a staunch supporter of the current U.S. administration. And his post did attract some negative responses alluding to that, and that he was underestimating the economic damage to be wrought by spiking energy costs.

Nevertheless, his message dovetailed with some fresh commentary noting how erstwhile darlings of Big Tech, in particular, have been so badly hit that they are now highly attractive.

"It's time to add more info tech to the portfolio," said Michael Darda, chief economist and market strategist at Roth Capital, in a note published Sunday.

Darda gives three reasons for his call. First, earnings estimates are up 28% from the fall of last year when the S&P 500 info tech index peaked. Next, despite that, the sector is down 17.2% from those all-time highs.

And third, those two moves together means that forward share-price to earnings ratios have collapsed to just over 20 times, which is roughly where they were at the tail end of the market's 'reciprocal tariff' pullback in 2025.

Indeed, Darda observed that the info tech sector's forward multiple has now fallen to 77% of its three-year average, which is about where the sector bottomed during the bear market of 2022 - though that was against far lower earnings estimates.

"When we recommended 'rotating' away from or 'hedging' info tech last summer, the sector was trading at a 17% premium to its three-year average forward valuation," Darda said. "Bottom line: we continue to like a mix of old economy sectors and growth/momentum plays that have been upended by recent volatility in energy and rates markets."

Of course, the argument that valuation multiples are supportive may evaporate if earnings crater. But most analysts remain positive about corporate profits, despite the possible hit to margins of higher energy costs.

A team of strategists at Goldman Sachs led by Ben Snider said that consensus forecasts point to 12% year-on-year earnings per share growth for the S&P 500 this quarter. That would be the sixth consecutive quarter of double-digit EPS growth, they noted.

"Among S&P 500 sectors, analysts expect info tech to grow EPS [earnings per share] by 44%, accounting for 87% of index EPS growth in Q1 2026," said the Goldman team. "Accordingly, the trajectory of AI capex investment will remain a major focus this season, as will signs of a return on that investment spending."

Finally, Goldman noted that last week investors continued to trim exposure to risk, with its U.S. Equity Sentiment Indicator dropping this week to -0.9.

"Sentiment Indicator levels below -1 have historically been predictive of above-average equity returns, although the signal improves when the indicator drops below -1.5," Goldman said.

The markets

U.S. stock-index futures (ES00) (YM00) (NQ00) are higher as benchmark Treasury yields BX:TMUBMUSD10Y dip. The dollar index DXY is up, while oil prices (CL.1) rise and gold futures (GC00) are trading around $4,530 an ounce.

   Key asset performance                                                Last       5d      1m       YTD     1y 
   S&P 500                                                              6368.85    -2.12%  -7.41%   -6.96%  14.12% 
   Nasdaq Composite                                                     20,948.36  -3.23%  -7.59%   -9.87%  20.93% 
   10-year Treasury                                                     4.401      5.00    36.10    22.90   19.10 
   Gold                                                                 4525.4     2.61%   -15.19%  4.46%   43.33% 
   Oil                                                                  101.26     13.92%  42.56%   76.38%  41.82% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

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The buzz

U.S. President Donald Trump said he was considering seizing Iran's Kharg Island, the crucial energy hub, as negotiations to end the war continue.

Federal Reserve Chair Jerome Powell will speak at Harvard University at 10:30 a.m. Eastern. New York Fed President John Williams speaks at 4 p.m. on the economic outlook.

Alcoa $(AA)$ and Century Aluminum $(CENX)$ shares are jumping more than 8% as aluminum prices spike after Iran attacked the Middle East's two largest producers of the metal.

Traders take note, most markets will be closed for Good Friday, when the nonfarm payrolls report for March is published.

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The chart

Torsten Slok, Apollo chief Economist, thinks something is out of whack in the Treasury market. In a bulletin posted over the weekend, he noted that long-term interest rates are normally driven by Fed expectations. "But a premium has emerged, and 10-year rates today should not be at 4.4%, but instead at 3.9%," he said. The reasons for the rise in what's known as the term premium could surround concerns about the widening U.S. budget deficit, and/or the Fed's quantitative tightening as it reduces its balance sheet. It may also be due to "lower foreign demand or concerns about Fed independence, including the possibility that the Fed could in the future raise the inflation target, leading to greater inflation variability," Slok said.

Top tickers

Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.

   Ticker  Security name 
   NVDA    Nvidia 
   TSLA    Tesla 
   AMZN    Amazon.com 
   GME     GameStop 
   MSFT    Microsoft 
   MU      Micron Technology 
   TSM     Taiwan Semiconductor Manufacturing 
   META    Meta Platforms 
   AMD     Advanced Micro Devices 
   AAPL    Apple 

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March 30, 2026 06:55 ET (10:55 GMT)

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