Markets react to ceasefire in Iran

Matt also explains some of the recent movements made by the so-called Magnificent 7 - Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla - and why some have been starting to question whether they are feeling more like the Lag 7?

Use the player icons above to listen on your favourite podcast app, or read the full transcript below.

This podcast was recorded on April 15 2026 and all information was correct at the time of recording.

Nothing in this podcast is personal advice – you should seek advice if you’re unsure what’s right for you. Investments rise and fall in value, so you could get back less than you invest. And past performance is not a guide to the future.

Full podcast episode transcript

[0:00] Emma Wall: Hello and welcome to the Switch Your Money On podcast from Hargreaves Lansdown. I’m Emma Wall – Chief Investment Strategist.

[0:05] Matt Britzman: And I’m Matt Britzman – Senior Equity Analyst.

This is your Investment Special, and there’s a lot to get into. Now, this episode, we’ll be covering market reactions to the ceasefire in Iran and taking a look at the Magnificent Seven stocks.

[0:17] Emma Wall: But, before we all dive into that, it’s a brand new tax year – Happy Tax Year! – ...

[0:21] Matt Britzman: Happy Tax Year, Emma!

[0:23] Emma Wall: ...and that means new allowances. It means new opportunities to make the most of your tax-efficient wrappers – and, data shows, the earlier you start investing, the better it is for client outcomes. So, we would encourage you people to get out there, using your SIPP allowance, using your ISA allowance, and your JISA allowance, and your JSIPP allowance. Anything on your stock, Matt?

[0:43] Matt Britzman: No, I think you’ve got them all.

[Pause]

[0:48] Emma Wall: Excellent.

So, with that in mind, we’ll take a look at the markets – there is a lot going on, as ever. I feel like all we’ve been talking about, over the last six weeks or so, is the Middle East – but it is because it is driving markets – although, now, it’s driving markets because people are choosing to ignore it?

[1:06] Matt Britzman: Yeah, it’s a strange dynamic going on.

If we look at some of the market reactions – UK markets, US markets... they’re now up, year-to-date. Talk us through how that happens!

[1:16] Emma Wall: So, if we look at the last six weeks, we have seen significant market volatility – and we’re not just talking about stocks here – although some of those in today’s moves have been quite something. We’re also talking about commodity prices – obviously, the oil price has really driven valuations across equities – but also gold has moved around a lot.

The bond market has moved around a lot. You know, things that we would normally see not having that much volatility – so I’m talking about high-quality government bonds – like US government bonds, UK government bonds – really seeing yields bounce around a lot. But now, if we look at where markets are... at the time of speaking – you know, this could change again...

[1:57] Matt Britzman: Hm!

[1:58] Emma Wall: ...’cause it has been one of those years, I have to say.

Actually, markets are at levels that we saw before the escalation – so before US and Israel went into Iran and escalated the conflict. And part of this is because of ceasefire talks. So, although they haven’t been linear – they very rarely are when it comes to things like foreign policy – particularly when it comes to people like Donald Trump and his foreign policy via social media – but we have seen markets choose to believe the hope and the expectation that there will be a resolution to this war... maybe not tomorrow – maybe not next week – but the positive rhetoric, and the hope of ceasefire talks, and the engagement, actually, from both sides – with the help of mediators – is bringing enough hope to markets that they are looking through the current issues – which include the continued lack of traffic through the Strait of Hormuz – way off pre-conflict levels – which continue to look through the current oil price – and, instead, look ahead to expectations of normalisation.

And we think that, actually, some of this is fair – because the investment market is very efficient, and investing is for the long term. We think, potentially, however, one thing that investors should be really mindful of is... just because the markets are choosing to look through the current noise, doesn’t mean there won’t be continued volatility – by which, I mean volatility associated with this conflict, but also volatility associated with other macroeconomic, geopolitical events that we see unfolding over the next 12 months. I think there’s opportunities for continued volatility associated with the mid-terms in the US – you know, there’s potential for volatility associated with what’s going on continues to go on between Russia and Ukraine – and also, tariffs... that was a big dominating story of last year – and there have been indications that, actually, Donald Trump will continue to use the mechanisms still available to him to execute short-term tariffs across certain sectors, and on certain geographies and regions.

So, we do think that markets look in a much better place than they did a couple of weeks ago – but, volatility, I’m afraid, is here to stay for the foreseeable.

[4:17] Matt Brizman: Yeah, quite right. I think this reminds me of something that we’ve spoken about before, Emma – which was not panicking when the volatility comes – and, you know, if we look at the sharp moves that we’ve seen in the week up to recording this podcast... if you’d sold out, or taken some action off the base of this volatility before, it’s very difficult to time that re-entry. And, as we’ve seen now – you know, like we’ve said – markets are at levels where they have been before – so not to say that they can’t go up and down from here, but really focusing on that long-term investment goal – sticking to a plan, making sure you are diversified – is often the best course of action for most investors – because, trying to time these market moves – and we know how quick they can shift... it’s just really difficult for anyone to do.

[4:59] Emma Wall: It absolutely is. It’s difficult for the professional investors to get right, let alone those of us who are retail investors – who have other things going on in their lives... I often joke, I spend an inordinate amount of hours researching, reading, and analysing, to basically say, ‘The best thing to do is absolutely...

[5:15] Matt Britzman: [Laughs]

[5:15] Emma Wall: ...nothing’ – but it is true. Because not just about market expectations have bounced around, interest-rate expectations have bounced around a lot over the last six weeks as well.

Just focusing on the Bank of England – because, for the majority of our listeners, that will be the interest rate that most impacts their lives in terms of their mortgages and their savings. We’ve swung, at times, from expectation of having two rate hikes before the year end – before the calendar year end – rate cuts, holds... Our house view is we actually think that the Bank of England doesn’t make any moves on interest rates while the conflict is ongoing – and then it does proceed with the previous path, which is cutting – although on a slower trajectory than was previously anticipated, the beginning of this calendar year.

Part of that reason is because – as we discussed before – the comparison with when Russian invaded Ukraine – and the inflation that followed that, and the interest rate path that followed that – isn’t ‘Apples with apples.’ Interest rates were at near-zero when that happened – now we’re at 3.75%, they are above what we call ‘Neutral rate’ – and so the ability, actually, for the system to absorb a bit of price inflation is there. As I said, it’s been highly volatile for equities, bonds, interest-rate expectations, gold, the oil price – and, when it’s like this, the best course for the majority of investors – professional or retail – is to do nothing.

[6:34] Matt Britzman: That relies on you already having a diversified portfolio – isn’t that right, Emma?

[6:37] Emma Wall: It absolutely does – you know, that guidance holds true, exactly that... is, if you have a portfolio that’s aligned to your risk appetite – and diversified across asset classes. If that’s not the case, now is as good a time as any to review your portfolio and make sure that you have that spread of risk across different asset classes – but what we’re not advocating is, ‘Because markets are volatile, go in there and start tinkering’ – ‘cause that way often leads to poor client outcomes.

I wanted to ask you about the ‘Mag 7,’ because lots of equities have bounced around over the last six weeks, but those in the more growthy end seem to have seen some more of the extreme moves – the more kind of acute volatility. We are now, however, at levels – as we record – that we saw six weeks ago... that may change.

What is going on with the ‘Mag 7?’ – because it has been a more diverse range of outcomes versus the previous years, where we saw these seven stocks move almost in unison – and up.

[7:38] Matt Britzman: Yeah – and we were calling them the ‘Lag 7’ – in the...

[7:41] Emma Wall: [Laughs]

[7:41] Matt Britzman: ...media in recent months!

Yeah – so what was traditionally seen as this cohort of stocks that could, to some extent, do no wrong... we’ve started to see that narrative start to have a few small holes in it – and performance, more recently, has been very varied across this cohort – and, as we said before, has been so in tune for a long period of time.

I think there’s a few reasons for that. Firstly, I just wanted to raise the point about the volatility of these stocks, in general. So, of the Mag 7 stocks – which we think of as seven of the largest US companies – for those who haven’t heard that term before... Six out of seven of those companies have what’s known as a ‘Beta above 1’ – that means they’re more volatile than the average market. Put another way, if the market goes up by 1% or 2%, you would expect a bigger move from those stocks – equally, when the markets go down.

So, as we’ve seen this year, there’s been quite a lot of volatility in the market, at large. We would expect that to translate into more volatility amongst these stocks – so there is that inherent volatility in there already.

We also had that we started the year at a period where valuations for that cohort were not crazy-high but elevated compared to where they’ve been over the past five years. So, that introduces another element of... expectations were already high – so, when you start to have some bad news coming in – which we had with the conflict kicking off – then, sometimes, those stocks are hit a little harder than others would be.

But, what we’ve also seen – kind of put a little more of a positive spin on that... Whilst we’ve had all this volatility, earnings estimates – and revenue estimates – for this cohort of companies have actually been relatively good. So, it’s not a case that we’re expecting near-term performance to be poor – but it’s more, I think, a case of, one – like I said, they’ve got that extra volatility in there – and then there’s a couple of specific niches going on at the moment – specifically with... Now, we know that the software – we’ve spoken about this before, Emma, with the ‘SaaS-pocalypse,’ as we’ve called it. So, a couple of these companies fit within that software cohort, and they’ve come under pressure because of that.

I also think that, now we’re in this AI super-cycle, we’re really starting to see a difference between companies that are investing heavily in AI, companies that aren’t – companies that are using all of their cash flow for this future growth – those that aren’t – and it’s presenting a lot of different opportunities for investors within this cohort – and those differences are something that we haven’t, potentially, seen before – or they’re being exacerbated now because of this ‘AI revolution’ that we talk about.

So, what do investors do from here?

Well, we don’t like to look at anything as a group like this. As Equity Analyst on the team that I work on, we like to look at individual companies – their merits, their benefits. So, when we look at that cohort, we do see three companies that we still think have good opportunities from here. We’re trying to balance future growth prospects against the price being paid for that growth – so that’s growth and valuation... we wanna see both of those things in the companies that we think have a better chance of performing.

So, first name that we’ve got is NVIDIA – which we’ve spoken about a little bit before – it features on our ‘Five shares to watch’ list for 2026. Really, the heart – the beating heart of this AI revolution – with, not just the chips that they make, but full AI factories that they’re making now.

Momentum’s been good – performance has been good – the fundamentals of this business are extremely strong. Our estimates suggest that consensus is a little bit low on revenue expectations, as we move into 2028 and 2029. So, ‘What’s that telling us?’ That’s telling us that the markets aren’t expecting this growth to continue for as long as we are – we have a slightly more positive outlook on how long demand for AI – and this kind of AI runway – is gonna last... and that view comes from a few things.

So, one of the things we’ve seen a real proliferation of this year is these new AI models – that, I mean, part of the reason why these software companies have been selling off is because Anthropic and OpenAI are releasing, seemingly, new models and new products every week.

Now, that drives more demand for AI tokens – and, ‘Who makes the AI tokens?’ – it’s the companies like NVIDIA and the hardware names – and we actually think there’s gonna be a little bit more economic benefit going to hardware players in the AI phase than software players.

Second name has been part of this software sell-off, itself – which is Meta. Meta, we think, is one of these names where... markets always try and ‘Um and ah’ whether they want them to spend loads of money – they don’t want them to spend loads of money – and we’ve seen this weighing scale go up over the past six months. But also, if we look back a few years ago – when they were building out of the grand Metaverse – and, you know, we saw markets have positive reactions when they actually were in back-spending. Now, towards the back end of last year, flipped that over again – they’re ramping investment heavily into AI – and, actually, that – in our view – presents as an opportunity because the sentiment really started to trough again towards Meta, halfway through last year – moving in towards the back end of last year – and we think that offered an opportunity for a really strong underlying business that Meta has – with the opportunity to actually benefit from AI.

Now, a lot of Meta’s AI investment is internally focused – they’re not building as a cloud giant might do – so they’re not building to sell to other people, using AI – they’re turning all of it inwards, to drive more ads – to drive better pricing – to drive more people onto their platforms – better engagement – all of the things that we think about for Meta – from Facebook, from WhatsApp – you know, threads now – Instagram – all of the ‘Family of apps,’ as they call it.

We think – when we look at Meta – that a lot of the downside has been priced in, in terms of the risk of all of this additional investment – but there’s not really any upside that they’re being given any credit for. And, actually, in recent weeks, their new AI team just released its first model – because Mark Zuckerberg gutted the team last year – brought a load of new people in. They released their first model – and it was actually pretty good for a brand new team – and we saw a positive reaction off the back of that – which kind of sums up our thesis a little bit... that markets aren’t really expecting much. So, it’s not gonna take much – in our view – to shift that sentiment a bit higher.

Now, of course, the risks involved with all of that investment are very real – so investors need to just make sure they’re comfortable with that, and that there might be some extra volatility because of that.

And then, the third name has been, probably, the ‘Mag 7’ company that fits as much in the ‘SaaS-pocalypse’ narrative – which is Microsoft.

Now, if we think about Microsoft, there’s a couple of business areas to it – you’ve got the Office apps, the Excel, the Word, etc – that we all know and love – and they’ve also got a really big cloud business. We think that, if AI continues to grow – as we think it might do – the cloud business is set to benefit on one side. We also think that Microsoft Word, Excel, PowerPoint... they don’t get replaced overnight.

People have been trying to disrupt those businesses for two decades – and they’re still the ones that we go back to and use over and over again. Interestingly, what we’ve also seen... the likes of Anthropic with their Claude models – they’re building integrated models into Microsoft’s products. So, you can go into Word, and you can access Microsoft’s Copilot – but you can also, through some links, access Anthropic’s model as well.

So, we actually think that this is a proof-point to our narrative here – that these AI models are less gonna just disrupt every software business, but they’re gonna sit on top as an extra layer that adds extra functionality, but you still need some of these underlying quality products to sit beneath it. Part of that is because these are embedded within enterprises already – there’s a trust, then, that has to be there.

Enterprise sales – so selling into major and large organisation – isn’t something you can just flick your fingers and have overnight. So, a lot of those embedded strengths that Microsoft has in abundance... that we don’t think that the market has really given them credit for – when, at the minute, everyone is kind of thinking, ‘We don’t know what the future’s gonna look like because things are changing so quick – we’re just gonna throw everyone out.’ We don’t think that’s, probably, the right narrative to take.

That said, there is a risk that hasn’t been there before. We don’t necessarily think that Microsoft’s valuation on a price-to-earnings basis – this is how we look at how much you’re pricing future earnings... It’s necessarily gonna return to previous highs, but we do think that the sell-off has been too hard and too fast – hasn’t necessarily given credit where it’s due for some of those stronger companies.

Like I said though, it’s certainly an environment that does warrant an extra degree of risk aversion, as to what we’ve experienced in the past five years.

[16:31] Emma Wall: Thanks, Matt – as ever, a very verbose explanation of what’s going on with the ‘Mag 7’ – ‘Lag 7,’ ‘Mag 7’ – ...

[16:38] Matt Britzman: Hm!

[16:38] Emma Wall: ...I suppose the future will tell.

It’s always worth saying – when we talk about individual stocks – that investors should do their due diligence. It’s worth remembering that individual stock investment does take a little bit more ongoing attention than investing in a collective – and, if the worst happens, you could lose all of your investment – and the individual stocks that you’ve just been talking about... not recommendations to buy – and diversification is always your portfolio’s friend – as we bang on and on about in this podcast – but even more so when markets are volatile and the outlook is unclear.

[17:06] Matt Brtitzman: Quite right, Emma – and just also to say that I do hold shares in NVIDIA, Microsoft, and Meta.

But that’s all for this week. This session was recorded on April 15^th 2026, and all information was correct at the time of recording.

Next week, Helen Morrissey and Clare Stinton are back for your Personal Finance episode.

[17:24] Emma Wall: Nothing in this podcast is personal advice, and you should seek advice if you’re unsure about what’s right for you.

[17:29] Matt Britzman: Investments rise and fall in value, so you could get back less than you invest, and past performance is not a guide to the future.

[17:34] Emma Wall: This episode is not a recommendation to buy, sell, or hold any of the investments or companies we’ve discussed today, and no view is given on the present, or future value, or price of any investment. Investors should always form their own view on any proposed investment.

[17:47] Matt Britzman: All that’s left for us is to thank our Producer, Elizabeth Hotson.

[17:50] Emma Wall: And to say thank you to, so much, for listening – we’ll be back again soon. Goodbye!

[17:53] Matt Britzman: Goodbye!