A sign posted on the exterior of BlackRock’s offices in San Francisco, California, on January 15, 2026.
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Asset management giant BlackRock has raised its outlook for U.S. stocks, saying the subdued impact of the Iran war and strong corporate earnings will create a favorable backdrop for domestic stocks.
The firm, which manages $14 trillion for clients, said in its weekly market note that it upgraded its rating by one notch from neutral to overweight.
As the war unfolded, BlackRock became cautious about domestic stocks. But strategists now say they believe the ceasefire is likely to be permanent and its impact will not be significant.
“After mitigating risks several weeks ago, two signposts have emerged that could lead to a re-elevation of risks. The first is concrete evidence of action to reopen navigation in the Strait of Hormuz. The second is the outlook that lingering macro effects are being contained,” the company said. “This comes as expectations for US and (emerging market) corporate earnings in 2026 have increased since the dispute began on February 28.”
Furthermore, BlackRock strategists say, “The threshold for the US and Iran to return to war is high,” further limiting the potential damage.
At the same time, the outlook for corporate earnings looks positive.
Since the financial year-end season has just begun, S&P500 Companies are expected to post an overall 12.6% profit increase in the first quarter, according to FactSet. If historical beat rates are maintained, that percentage will rise to 19%, the forecasting firm said.
Additionally, technology profits are expected to increase by 45% this year, although the sector has only increased marginally this year.
BlackRock said this pushed information technology’s valuation to the lowest valuation of the S&P 500 against 10 other sectors since mid-2020.
“Risks are rising again in the US and emerging markets due to strong corporate profit expectations and limited unpaid damage to global growth,” the strategists said. “We are focused on margins in the first quarter US earnings season and remain focused on thematic opportunities such as defense.”
These are the only two regions that are overweight in BlackRock’s equity portfolio.
