When the war in Iran ends, which stocks will be the winners, and which will be the losers?

The AIs tell us that during a war we get more conservative with our money and revert to what my grandma did: liquidate everything into cash and put it under her mattress (for real). It may sound old-fashioned, but it is what is happening in the market today.

This means that people do not want their money invested, but want their cash returned so they can put it in the bank or under the mattress.

When the war started, the War Trade was popular. The War Trade involved investing in oil and defense companies. As the war restricted the world’s supply of oil, the price went up benefiting companies like ExxonMobil. In a war, we need more bombs, planes, and missiles, so defense stocks like Lockheed Martin went up.

The opposite of the War Trade is the Peace Trade.When the war ends, we tend to relax and start spending money again. So, how do you play the Peace Trade as an investor? The AIs tells us that to pick the winners in the Peace Trade, first identify the losers of the War Trade.

Find the stocks that have been beaten down in price mostly because of the war.

Airlines were an obvious pick since rising fuel costs, because of the war, have forced fares to increase, and in turn, has reduced the volume of air travel. The rebound of the airlines could be like the revenge-travel rebound we saw post COVID. The top pick was Delta.

The category of consumer-sensitive companies like Amazon and Tesla were the next favorite of the AIs to rebound after a war ends. Increased fuel costs for transportation and home heating crowd out consumer spending on discretionary items like electronics from Amazon or a new car from Tesla.

In addition to technology stocks like Google, small-cap stocks were named as poised for a strong comeback. Smaller companies, like your household, are more sensitive to energy costs and more likely to bounce back as energy prices ease after a war ends.

The recommendation was the iShares Russell 2000 (ticker: IWM), which is a basket of 2,000 small-cap stocks.

With daily announcements about the war, trading stocks is tricky territory. What the AIs tell us makes intuitive sense, but the stock market is a multivariable equation. If it’s not the war moving stock prices, it could be something else tomorrow.

And as we were scheduling this email for distribution on Tuesday night, President Trump announced a two-week ceasefire with Iran. In Wednesday morning trading, the Peace Trade was in full swing with shares of ExxonMobil down $10 to $155, Amazon up $8 to $221, and IWM up $10 to $260.

Should have published this post last week. Sorry.

Things I think about

The three most spoken languages in the world are Mandarin, Spanish, and English.

Response from ChatGPT

When the war in Iran ends, which stocks will be the winners, and which will be the losers?

The key insight: you don’t want the stocks that benefit from the war — you want the ones that were hurt by it.

When the Iran conflict ends, the biggest market move is usually:

• Oil prices fall

• Inflation expectations drop

• Risk appetite returns

That creates a very specific “reversal trade.”

🧠 What history + current data say

• Oil and defense stocks rise during war

• Airlines, tech, and cyclicals fall due to higher costs and uncertainty

• Markets often rally when peace expectations rise, led by growth sectors

• Analysts explicitly expect stocks to rebound on lower oil after conflict ends

🎯 The stocks most likely to jump when the war ends

1. Airlines (BIGGEST upside)

These get crushed by high oil → biggest rebound when oil drops.

• Delta Air Lines

• United Airlines

• American Airlines

Why they pop:

• Jet fuel is a top cost

• Oil down = immediate margin expansion

• Travel demand rebounds with lower uncertainty

👉 Historically, this is often the fastest trade after conflict de-escalation.

2. Consumer discretionary (travel, retail, autos)

These get hit by inflation + fear.

• Amazon

• Tesla

• Nike

Why they pop:

• Lower gas prices = more consumer spending

• Sentiment improves quickly

• These are “beta plays” on optimism

3. Tech / growth stocks (rate-sensitive winners)

War → inflation → higher rates → hurts tech
Peace → opposite.

• NVIDIA

• Microsoft

• Apple

Why they pop:

• Lower oil → lower inflation → lower rate pressure

• Growth stocks re-rate upward quickly

• These led recent “peace rally” moves

4. Small caps (most under-owned, most explosive)

• iShares Russell 2000 ETF

Why they pop:

• Most sensitive to economic sentiment

• Most sold during geopolitical fear

• Biggest snap-back when risk returns

5. Industrials / cyclicals

• Caterpillar

• Boeing

Why they pop:

• Global trade expectations improve

• Energy input costs fall

• Capex outlook strengthens

🚫 What likely underperforms after peace

These did well during the war:

• Oil: Exxon Mobil, Chevron

• Defense: Lockheed Martin

These often stall or drop as oil prices normalize and war demand fades.

🧩 Bottom line (the trade in one sentence)

Buy what war punished, not what war rewarded.

If the Iran conflict ends suddenly, the highest short-term upside is typically:

👉 Airlines → small caps → tech (in that order)

If you want, I can give you 3 specific stocks I’d buy for a 30–60 day “peace trade” with expected % upside.

yes

Alright — here are 3 high-conviction “peace trade” picks if a Iran conflict de-escalates over the next 30–60 days. These are geared for maximum percentage upside, not safety.

🎯 Top 3 Stocks for a “War Ends” Rally

1. Delta Air Lines — Highest immediate upside

Why this is #1:

• Jet fuel = ~25–30% of costs

• Oil drop flows directly into margins within weeks

• Demand + pricing improves when fear subsides

What happens if oil drops $10–20/barrel:

• Earnings estimates jump quickly

• Stock often re-rates fast

👉 Expected move: +15% to +30%
👉 Risk: recession signals or demand slowdown

2. NVIDIA — Fast money flows back into growth

NVIDIA Corp (NVDA)

Why NVDA (not just “tech broadly”):

• It’s the highest-beta large-cap in the market right now

• Any drop in inflation/rates = immediate multiple expansion

• Institutions pile back into AI leaders first

👉 This is less about fundamentals, more about capital rotation

👉 Expected move: +10% to +25%
👉 Risk: already crowded trade, volatility

3. iShares Russell 2000 ETF — The catch-up trade

iShares Russell 2000 ETF (IWM)

Why this is sneaky powerful:

• Small caps get crushed during uncertainty

• They are most sensitive to falling rates + improving sentiment

• Historically outperform in early “risk-on” shifts

👉 If peace coincides with falling yields, this can rip

👉 Expected move: +12% to +25%
👉 Risk: if rates don’t fall, upside is capped

🧠 How I’d actually play it (if this were real money)

• 40% DAL → pure oil/peace play

• 35% NVDA → momentum + liquidity magnet

• 25% IWM → broad risk-on kicker

⚠️ What most people get wrong

They buy:

• Oil (too late)

• Defense (already priced)

The real move is:
👉 From fear → growth + travel + beta

🧩 One-line strategy

You’re betting on: oil ↓, rates ↓, fear ↓ → risk assets ↑ fast

Response from Claude

When the war in Iran ends, which stocks will be the winners, and which will be the losers?

Great timing on this question — there's active speculation about this right now, with Trump suggesting the U.S. could end the war in " two to three weeks," and the S&P 500 already posting its best day since May last year on reports that Iranian President Pezeshkian may be open to peace with guarantees.

Here are the sectors and stocks most likely to surge on a ceasefire:

✈️ Airlines — Biggest "Peace Dividend" Play

Airline stocks have been hit with two big negatives from the war — rising fuel costs and lower travel demand. A peace dividend scenario could rapidly boost margins and demand, with airlines set to benefit the most. Seeking Alpha Names to watch: UAL, DAL, LUV, AAL.

🛒 Consumer Discretionary

Rising fuel costs from the Iran conflict have pressured consumer discretionary stocks, and the sector is down over 6% since the war started. Seeking Alpha A snap-back could be sharp. ETF play: XLY. Individual names include AMZN, TSLA, HD, MCD, TJX, LOW, BKNG, SBUX.

📦 Small Caps (Russell 2000)

IWM offers broad exposure to small U.S. companies most sensitive to oil price shocks and poised for a strong rebound if Middle East tensions ease. Seeking Alpha

🛢️ Energy — Cuts Both Ways

Energy stocks have been the war winners (up ~21.7% since February), but when peace comes, oil prices will fall. The trade reverses — energy stocks likely sell off when war ends, not rally.

📈 Broad Market / Growth Stocks

Analysts expect S&P 500 earnings to grow roughly 13% in Q1 2026, which would mark a sixth straight quarter of double-digit gains. If the conflict ends expeditiously, analysts anticipate a return to market optimism, citing the strength of corporate earnings. Northeastern Global News This means QQQ and growth tech could re-rate quickly once the geopolitical overhang lifts.

🛡️ Defense — Likely to Sell Off

Defense names like LMT, NOC, GD have been the war's biggest winners (LMT +38% YTD, NOC +33% YTD). A peace deal would likely trigger profit-taking in these names.

Bottom line: The clearest "war ends" trades are airlines (JETS ETF is a one-stop play), consumer discretionary (XLY), and small caps (IWM) — all of which have been beaten down by high oil and reduced consumer confidence. The broad market (SPY/QQQ) should also re-rate higher as risk sentiment improves. Avoid being long energy or defense at the moment of a peace announcement.

This is not financial advice — these are analytical observations based on current market dynamics.

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