Why stocks have hardly blinked despite 2 weeks of rocky headlines: Morning Brief

This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning along with:

• The chart of the day

• What we're watching

• What we're reading

• Economic data releases and earnings

It's been a rough week for headlines in the mainstream news.

Conflict in the Middle East is heating up further, with Iran launching missiles at Israel amid the latter's campaign in Lebanon and many wondering if there will be a response. Hurricane Helene decimated the Southeast. And roughly 45,000 dockworkers walked out on the job at ports across the country, though that one appears to have concluded successfully.

It's not hard to reason that things feel far more unsteady than they did a week ago. But the markets are telling a different story.

Through the four trading days this week, the S&P 500 (^GSPC), the Nasdaq Composite (^IXIC), and the Dow Jones Industrial Average (^DJI) are all off about 1% or less, with the latter two still in striking distance of their all-time highs.

The market resilience is an example of how Wall Street equity strategists and economists are assessing the rising risks to the bull market rally.

"While the latest escalation of the conflict between Israel and Iran is worrying, our view remains that it would take a significant further widening of the war, including actual disruption to energy supply chains, to make a material difference to the outlook for the global economy and financial markets," Capital Economics deputy chief markets economist Jonas Goltermann wrote in a note to clients on Thursday.

The same could be said for how economists assessed the dockworkers strike.

"The strike could hit economic growth and boost inflation, but only if it is long-lasting," Morgan Stanley economist Diego Anzoategui wrote in a note to clients this week, before a resolution emerged. Markets, it seems, learned not to presuffer — and it paid off.

To be clear, any of these issues escalating could (or could have) weighed on stocks. Fundstrat head of research Tom Lee, who's typically viewed as one of Wall Street's more bullish strategists, has been saying he's cautious about the month ahead for stocks.

Lee highlighted in a video to clients on Wednesday night that the ongoing port strike could have been "economically damaging" and was something to "keep in mind." He also pointed to escalating tensions in the Middle East as a "short-term" risk. And even though the ports will come back online, they could have just as easily not have.