Uncertainty is at its peak! The conflict between the US and Iran continues, and the Wall Street giants in asset management are all lying low, waiting for opportunities.

As the conflict between the US, Israel, and Iran enters its fifth week, trillions of dollars have evaporated from the global stock market value, international oil prices have surpassed $100 per barrel and remain high, and expectations for interest rates and inflation in the market have been completely reassessed. The market originally hoped that this week would bring clarity on when and how this chaos would end. However, investors are still eagerly waiting for answers. In a speech given by US President Trump during prime time on Wednesday, he hinted at launching more attacks on one hand, while releasing signals of peace and reconciliation on the other hand, showing contradictory attitudes. At the same time, Trump did not provide a roadmap for the reopening of the Strait of Hormuz, essentially telling allies to handle it themselves. As a result, US stocks plummeted in early trading on Thursday, but then almost fully recovered following a short-term news that "Iran is discussing a shipping agreement with Oman". This is not a ceasefire or a resumption of operations, it is simply a regulatory framework. The market's reaction to such fragmented news caused a drastic 1.5% fluctuation, indicating how fragile investors' psychology currently is. On Tuesday, the S&P 500 index surged by 2.9%, achieving its best single-day performance since May of last year, solely due to the market's anticipation of a easing of the conflict. This cycle of "brief comfort disappointment again spreading panic temporary relief" has become a typical reflection of the market since the conflict started. Although the benchmark index has accumulated a gain of over 3% this week, achieving its best weekly performance since November of last year, this rebound is entirely built on fragmented news rather than a substantive resolution of the situation. Since the outbreak of the conflict, Brent crude oil has skyrocketed by about 50%, marking the largest monthly gain in decades. As the shortened trading week comes to a close due to the holidays, oil prices are once again approaching $110 per barrel. Fidelity Securities has lowered its year-end target for the S&P 500 index, and the International Energy Agency (IEA) has warned that the global oil supply situation in April will be much more severe than it was in March. In this context, Wall Street asset management giants are making real investment decisions. Thrivent, a Minneapolis-based financial services company with assets under management of $212 billion, is cautiously reducing growth stocks, increasing exposure to value stocks, and remaining calm rather than panicked. Currently, they are focusing on overlooked blue-chip stocks and preparing to increase positions in the coming weeks when the market dips. "The most unsettling and least opportune time to add positions is often the best time to act," he said. "When uncertainty reaches its peak, it is often the market's bottom." Some institutions have chosen not to wait any longer. Florian Ielpo, Head of Macro at Lombard Odier Investment Managers, has adjusted his portfolio to what he calls a "cruise mode" - allocating only 40% to risky assets, with the remaining funds going to bonds, commodities, and volatility hedging products. "I do not believe in staying invested all the time," he said. "During times of severe market shock, it is necessary to reduce exposure and hedge risks." He compares the current situation to a flight encountering turbulence - fasten your seatbelt and patiently wait for the bumpiness to pass; however, he also warns that if oil prices continue to operate within the $100-120 range, it will create unbearable economic pressure. Currently, Ielpo issues daily market commentaries in response to client inquiries, and the number of participants in his outlook conference calls has doubled. "The market is extremely eager for certainty," he said. "The word 'uncertainty' is being repeated over and over." Rushabh Amin of Allspring Global Investments believes that this round of shocks is mainly transmitted through interest rates and the US dollar, rather than directly impacting the stock market - it is this reassessment of asset pricing that is driving all market fluctuations. His most resolute trading strategy is to go long on the US dollar, viewing it as a contrarian position. David Lebovitz of J.P. Morgan Asset Management gives a pessimistic outlook: if the average oil price for the whole year reaches $125, it will drag down global economic growth by 1 percentage point. His core portfolio recommendation is to hold US tech stocks, as he believes they are better able to withstand geopolitical disturbances compared to other assets, while also shorting the European markets. The performance of the bond market remains relatively rational, but there are still hidden risks in the private credit market. Matt Wrzesniewsky, Head of Fixed Income Client Portfolio at Vanguard Group, states that although the credit market has been repriced, there has been no systematic collapse, thanks to the inherent resilience of the US economy. Currently, bond yields still offer sufficient attraction, and he believes that mid-term investment-grade corporate bonds offer the best risk-return ratio. "For investors considering moving to cash, we recommend caution," he said. All this turmoil is happening against the backdrop of a US economy that is still showing growth in most indicators: strong retail data, expanding manufacturing, and remaining consumer resilience. Royal of Thrivent points out that current US GDP per unit of oil consumption is only a fraction of what it was in the 1970s, and energy independence has significantly increased - the economy has structural resilience against shocks. However, the rise in oil prices is eroding the consumption dividend brought by tax cuts, with the lowest-income groups being hit the hardest. "This will exacerbate the economic pattern of K-shaped differentiation," he said. "The gap between economic data and the real-life experiences of the people is continuously expanding." The core question for the market now has shifted from "when will the war end" to a more challenging question: how long will the economic damage persist after the conflict is over? Even the bulls admit that if oil prices remain high in the long term, it will eventually stifle demand. BCA Research has been tracking a comprehensive index covering White House economic and political pressures (including stock market returns, US bond yields, mortgage rates, gasoline prices, and presidential approval ratings) to determine when the government may change its policy direction. The index is currently sending strong warning signals. "Measured by this index, the US has paid a high economic and political price," said Felix-Antoine Vezina-Poirier of BCA. "Trump's consistent pattern is: initially demand sky-high, start negotiations, gradually compromise, focus on core demands, and then announce victory."