From Financial Modeling Prep: 2025-05-12 07:35:00

Yardeni Research highlights the unprecedented bull market of 2025 driven by geopolitical chaos, not equities or AI. Global markets are affected by conflicts from South Asia to the Red Sea, with investors seeking safe-haven assets amidst rising tensions.

India’s missile strike in Pakistan over Kashmir shocked markets, causing global risk assets to sell off while gold and defense stocks rallied. Social media trends like ‘#IndiaPakistanWar’ served as a precursor to the market shockwave.

China faces protests over U.S.-driven export declines, with up to 20 million jobs at risk due to tariffs. The People’s Bank of China cut rates amid concerns of slowing growth and labor instability, signaling deep economic distress.

President Trump’s isolationist trade stance, except for a deal with Ukraine, heightens inflation risks. The lack of security guarantees in the pact leaves European markets vulnerable to Russia-Ukraine conflict disruptions.

Safe havens like gold, defense stocks, and treasuries surge in demand amid geopolitical uncertainties. Investors are advised to strategically allocate to these assets as geopolitical hedging becomes essential in today’s volatile markets.

With geopolitical risks embedded in valuations, real-time tracking of economic spillovers and elevated risk premiums are crucial for investors. Yardeni Research suggests that fear, rather than greed, is now the driving force behind market momentum in this unique bull market scenario of 2025.



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