JPMorgan Urges Investors To 'Buy The Dip' Amid US-Iran War: Mohammed El-Erian, Gary Black Diverge On Long-Term Economic Impact

As the U.S. and Israel transition into a sustained air campaign against Iran, Wall Street's top strategists are split on whether the resulting market volatility represents a generational buying opportunity or the beginning of a stagflationary crisis.

The Case For Resilience

JPMorgan has advised clients to “buy the dip,” characterizing the escalation as a temporary disruption rather than a reason to exit equities.

Strategist Mislav Matejka noted that while oil prices have spiked following the death of Supreme Leader Ayatollah Ali Khamenei, fundamentals remain solid and the tech sector's repricing is largely complete.

Gary Black, managing partner of The Future Fund, echoed this optimism. Despite Brent crude’s jump, Black views the turbulence as a window for entry.

"We view the volatility as temporary; once the conflict de-escalates, oil prices will retreat," Black stated. He projects a 12% year-over-year growth for S&P 500 earnings, reaching $310 by year-end 2026.

Mounting Risks Of Stagflation

In contrast, Allianz Chief Economic Adviser Mohamed El-Erian offered a more sobering assessment. Speaking on the surge in oil and core goods prices, El-Erian warned that a "stagflationary wind is starting to blow through the U.S. economy."

He emphasized that the global impact depends entirely on the “duration and the spread” of the war. "The longer it lasts, the more it spreads, the more stagflationary it is for the global economy," El-Erian noted, adding that policy flexibility for the Federal Reserve is currently limited.

Strategic Asset Allocation

UBS CIO identified the Strait of Hormuz—responsible for 21 million barrels of oil per day—as the primary “downside scenario” indicator. While their base case assumes brief disruptions, they recommend a modest allocation to gold, which recently neared record highs of $5,395/oz.

As the Associated Press officially designates the conflict a “war,” the consensus among major banks remains focused on long-term diversification. While JPMorgan and Black urge investors to reclaim new highs, the market continues to watch the 10-year Treasury yield, which El-Erian expects to trade in a volatile range of 4% to 4.5%.

Nasdaq Lags, S&P 500, Dow Jones Gain In 2026

As of Monday’s close, the Dow Jones index rose 1.08% year-to-date, whereas the S&P 500 was 0.34% lower and the Nasdaq Composite index was down 2.09% in 2026.

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq 100, respectively, closed higher on Monday. The SPY was up 0.057% at $686.38, while the QQQ advanced 0.13% to $608.09.

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