Conflict Impact on Assets and Stock Markets: José Luis Cava’s Analysis

The US dollar, the US economy, and the S&P 500 have emerged in a strengthened position, according to analysis by financial analyst José Luis Cava. This assessment comes as Cava examines the trajectory of geopolitical conflict and its specific impacts on global assets and stock markets.

The analysis follows a period of significant instability in the Middle East. On April 7, 2026, reports indicated that a state of war in Iran had persisted for one month, prompting evaluations of which investment funds remained positive during the conflict.

Cava has focused his recent research on the implications of the Middle East conflict for financial markets, including whether the stock markets are currently positioned for a sharp rise. His analysis includes an evaluation of how fear and geopolitical tension influence market volatility and asset pricing.

Market Divergence and the Role of China

The current reinforced state of the US dollar and economy follows a period of divergence noted by Cava in 2025. In an analysis published on June 3, 2025, Cava highlighted a disconcerting movement in the markets: the gap between the evolution of the US dollar and the yield of 10-year bonds.

During that period, Cava stated that China was a primary factor behind the depreciation of the US dollar and the simultaneous rallies seen in the stock market, gold, and Bitcoin.

This trend contradicted the expectations of many reference analysts during the first quarter of 2025. At that time, the prevailing consensus suggested that the United States was heading toward a recession, based on the theory that an intensifying tariff war would drive the dollar higher and increase interest rates, thereby slowing the economy.

Contrary to those forecasts, Cava observed that the US economy showed clear signs of acceleration while the dollar depreciated during the first half of 2025.

Impact of Geopolitical Conflict

Cava’s more recent work, including a detailed analysis released on March 6, 2026, centers on the implications of the Middle East conflict for financial markets. This research examines how regional instability affects the stability of the S&P 500 and the overall resilience of the North American economy.

The reinforced position of the US dollar and the S&P 500 suggests a market reaction that deviates from traditional fears of geopolitical contagion, as the US economy continues to show strength despite the ongoing war in Iran.