JPMorgan strategist Mislav Matejka argues that the latest Iran escalation should be viewed as a buying opportunity rather than a reason to retreat from equities. In a Monday note, Matejka stated that despite expected short-term volatility, the current geopolitical shock presents a chance to add exposure as fundamentals remain positive.

Matejka believes the military escalation is unlikely to persist given political calendars, and any oil price spike will likely fade due to excess supply. The bank maintains a constructive outlook, citing resilient economic activity, a positive wealth effect for consumers, and strong corporate capital expenditure. Inflation expectations remain contained due to softening wage growth and the deflationary impact of AI.

JPMorgan also notes that both the Mag-7 tech giants and anti-AI groups have already derated significantly, with the Mag-7 trading near 10-year relative P/E lows. While these sectors may continue to lag, the bank suggests absolute downside could be more limited from current levels. The firm maintains overweight positions in international markets, emerging markets, and Eurozone equities, pointing to improving earnings prospects and expected German fiscal stimulus.