Citi upgrades U.S. stocks, citing ‘eventual cessation’ of U.S.-Iran war
The U.S. stock market is once again the place to be, it seems. Citigroup upgraded U.S. stocks to overweight from neutral late Monday, noting that the war between Iran and the U.S. will eventually come to an end — allowing equities to move higher. “For now, our price targets still see upside to year-end, assuming an eventual cessation in the U.S.-Iran conflict,” wrote strategist Beata Manthey. “At this point, we assume a headwind to consumption, inflation and Fed rate considerations, probably manageable so long as the current ceasefire trends to a wind down of hostilities over the next several weeks.” U.S. equities have proven resilient in the face of the Iran war. The S & P 500 on Monday ended at 6,886.24, erasing its losses since the conflict began. At one point during the March selloff the benchmark was flirting with a correction, down as much as 9.1% from its record closing high set in January. .SPX mountain 2026-02-27 S & P 500 since Iran war began With its position change, Citi became the second major institution this week to turn more positive on U.S. stocks. On Monday, BlackRock moved to overweight from neutral on domestic equities. “We saw two signposts that would lead us to re-up risk after reducing it a few weeks ago,” BlackRock said. “First, tangible evidence of actions that would reopen flows through the Strait of Hormuz. And second, visibility on the lingering macro impact being contained” What to buy Within the market, Citi recommends investors buy materials, health care and tech stocks. Materials is the second best-performing S & P 500 sector this year, up more than 14%. Leading the gains are LyondellBasell and Dow , up 74% and 71%, respectively. Health care has lagged, losing 4% in 2026. But many stocks, such as Moderna and DaVita , have outperformed. The former is up 72% for the year, while the latter has jumped 33%. Tech as a whole has also struggled this year, falling 1.4%. Yet, the monsters in the group, such as Nvidia and Alphabet have gained nearly 9% and 12%, respectively, in April.
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