When markets want to turn the page
A war in the Middle East, rising energy prices, heavy public deficits: in theory, all of this should weigh on the stock screens. However, investors have mainly focused on the idea of a temporary shock. Stocks rebounded after the de-escalation announcements, and Wall Street even regained some of its pre-conflict levels in certain areas. The message is clear: markets are betting on a quick return to calm, not on a lasting crisis.
This is where the gap between two worldviews comes into play. On one side, finance looks at profits, interest rates, and capital flows. On the other, economists scrutinize the ripple effects: more expensive energy, more persistent inflation, more fragile credit. The first camp sees mainly resilience. The second sees mainly points of rupture.
The IMF sees beyond the rebound
The International Monetary Fund revised its outlook in its latest April 2026 World Economic Outlook report. Its central scenario now projects global growth of 3.1% in 2026 and 3.2% in 2027, on the condition that the conflict remains limited in time and scope. The institution also adds that global inflation is expected to slightly rise in 2026 before easing in 2027.
The issue is not just the war itself. The IMF emphasizes several existing vulnerabilities: high public debt, trade tensions, stretched financial valuations, and occasionally weakened institutional credibility. In other words, the geopolitical shock does not hit a healthy system. It adds to existing imbalances, making contagion more likely.
Why the stock market can rise when the economy slows
At first glance, the paradox is shocking. But it’s quite simple. The stock market does not reward the current state of the economy in the short term. It values what matters for future profits: the speed of exiting a crisis, the ability of companies to absorb costs, and the idea that a shock will remain contained. If investors believe that oil prices will normalize quickly, they buy. If they believe that a doomsday scenario remains unlikely, they buy even more.
In this context, the big winners are not uniform across sectors. Energy majors, some defense groups, or players able to set their prices can benefit from the tension. The potential losers are more numerous: airlines, chemistry, distribution, small businesses highly dependent on raw materials, and lower-income households that feel the increase in fuel and food prices more quickly. The geopolitical shock does not distribute evenly. It hits those with the least margin first.
Financial imbalances, the other fault line
The debate is not just about “Stock market versus IMF”. It mainly pits two temporalities against each other. Markets focus on the upcoming quarter. The IMF looks at the mechanism of risk accumulation. In its diagnosis, the combination of high debt and risk appetite can act as an amplifier. When all is well, it fuels the rise. When the weather changes, it accelerates the correction.
This is where the most fragile products of the moment come into play: heavily indebted private equity, cryptocurrencies, leverage strategies, complex finance. As long as money flows, they give the impression of a robust system. But with the first serious shock, their illiquidity can become a collective problem. The IMF is not saying that a crisis is certain. It is saying that the terrain is more slippery than it appears.
Who wins, who loses, and what to watch
On the winners’ side in the short term are markets betting on a quick de-escalation, investors exposed to large values capable of absorbing shocks, and energy producers if prices remain high. On the losers’ side are energy importers, fuel-intensive sectors, households exposed to price hikes, and fiscally fragile countries. The same shock can enrich portfolios and impoverish households at the same time.
The real challenge now is not whether the indices can still set records. They can. The real question is whether the markets are not anticipating a return to normal too quickly. If the conflict persists, if oil remains above central banks’ comfort level for a long time, or if financial chains react poorly, the scenario of smooth sailing could crack quickly.
What needs to be followed in the coming days boils down to three points: the evolution of the conflict, energy prices, and the next central bank reaction. As long as these three variables have not found a semblance of stability, the optimism on screens will remain fragile. And the IMF will continue to look beyond the rebound.
