Wall Street sounds the "bottom fishing" bugle: with the fire of Iran's war still burning, JP Morgan has already prepared a "shopping list".

Notice that, despite the ongoing tensions in Iran with no signs of slowing down, Wall Street strategists are encouraging investors to start buying stocks again. The pullback in the S&P 500 Index and Nasdaq 100 Index this month has weakened investor confidence, as hostile actions in the Middle East have pushed up oil prices and raised inflation concerns. Nevertheless, stock market strategists from Barclays Bank, CIBC Capital Markets, and Truist Advisory Services Inc. are still advising clients to ignore short-term risks, citing attractive valuations, stable profit expectations, optimistic sentiment towards artificial intelligence (AI) technology, and the historical trend of market rebounding after geopolitical shocks. These views have injected a dose of confidence into traders. Currently, the S&P 500 Index is heading for its fifth consecutive week of declines, having fallen nearly 6% since the outbreak of the Iran conflict. Sentiment indicators, typically used as contrarian indicators, are at low levels. In addition, the index's forward 12-month price-to-earnings ratio is at 19.5 times, consistent with the average level of the past decade. Christopher Harvey, head of stock and portfolio strategy at CIBC Capital Markets, wrote in a research report on Thursday, "Overall, the stock market is currently in a 'walk, not run' stage, but the starting gun has been fired." Stock market experiences worst day since January Short sellers dominated the market on Thursday, with the S&P 500 Index falling 1.7% to 6477.16 points, marking its worst single-day performance since January. As doubts linger over whether the US and Iran can achieve a ceasefire in the short term, the Cboe Volatility Index surged above 27. An indicator of expected volatility for the Nasdaq 100 Index has been hovering around 30. This steep decline has pushed the S&P 500 Index nearly 1000 points below Harvey's year-end target of 7450 points, suggesting a 15% upside if the strategist's prediction is correct and significant war-related risks do not materialize. Despite acknowledging the uncertainty in the situation with Iran, Harvey still advises investors to "begin deploying capital in a slow and methodical manner," naming tech giants like Google, Apple, NVIDIA, and Palantir as stocks to consider. Harvey is not the only one seeing buying signals. Morgan Stanley's trading desk shifted its view on the US stock market from tactically bearish to neutral on Wednesday, with Andrew Tyler, head of global market intelligence at the company, working on a "shopping list." His team is bullish on energy stocks and mega-cap tech stocks. Keith Lerner, chief market strategist at Truist, is encouraging clients to take advantage of the dip to buy assets like large-cap stocks, while keeping some cash on the sidelines in case geopolitical tensions further weigh on stock prices. Lerner said, "If you have cash, there's no need to wait for the perfect timing, because bullish news could suddenly emerge, catching you off guard. If the market undergoes a real thorough sell-off, that could be a more opportune time to get more aggressive." The "extremely consistent pattern" of stock market returns after geopolitical crises, as described by Barclays Bank, may also inspire investors. For example, analysts Ajay Rajadhyaksha and Amrut Nashikar wrote in a research report on Thursday: in the three months following the 9/11 terrorist attacks in 2001, the S&P 500 Index rose by 2.5%; after the start of the second Gulf War in 2003, the index surged by 13%; and since the start of the Russia-Ukraine conflict, the index has risen by 60%. They said, "Historical experience is very convincing." In the current scenario, US stocks are supported by what analysts call a "non-cyclical investment cycle," including capital expenditures related to AI and defense and energy. US corporate profits are expected to grow by 15% this year, the largest increase since the end of the COVID-19 pandemic. They said, "There is a 'wall of worry' in front of usbut it's worth climbing." Meanwhile, news from the Middle East conveys conflicting information. On Thursday morning, after Iran rejected the US-led peace agreement, President Trump threatened more aggressive military action. However, on Thursday afternoon, Trump said negotiations were "going very smoothly," and postponed the deadline for Iran to reach an agreement, otherwise facing further attacks. To Ohsung Kwon, stock strategist at Wells Fargo, this situation creates a "painful upward trading" for investors, with expectations of mega-cap tech companies and the Nasdaq 100 Index outperforming the broader market. Lerner from Truist added, "With the market pullback, the risk-reward ratio is improving," suggesting that market pullbacks are the "entry fee" investors must pay to enter at attractive prices. He recommends gradually and cautiously increasing exposure to high-quality US mega-cap stocks to prepare for potential rebounds. Lerner warned, "Investors need to remain vigilantrather than trying to be heroes."