Even as the International Energy Agency warns the Iran conflict threatens global energy security and U.S. tariff rates climb to their highest level since the 1940s, the S&P 500 posted a fresh record high. Investors appear to be pricing out the swirl of geopolitical risk and protectionist rhetoric, treating the market as if it trades on “earnings before Iran, tariffs and dubious announcements.”

The disconnect between the VIX and the economic‑policy uncertainty index illustrates how market volatility has stayed modest while policy anxiety spikes, a pattern only seen during Trump’s first term. Academics Luboš Pástor and Pietro Veronesi argue that ambiguous White House messaging—now “on steroids”—leaves investors reluctant to react to daily tweets, prompting hedge fund Anaconda Invest to adopt an “ignore Trump” stance.

Meanwhile, AI‑driven growth and the dominance of semiconductor giants—collectively the “Magnificent Seven”—have buoyed the index, offsetting tariff drag and higher energy prices. Société Générale’s Andrew Lapthorne notes record asset‑income flows are hunting yield, while market pressure forced Trump to soften tariff rollouts after a “Liberation Day” dip. Investors thus continue to sideline policy turbulence, focusing on earnings momentum.