Jim Iuorio argues the market’s pullback is a volatility phase, not a broken bull case: he sees Middle East conflict, rising yields, oil, and tariffs as near-term inflation and sentiment shocks, but still thinks risk assets can work later if the S&P holds key levels and the Fed keeps easing. He remains constructive on gold, oil, and a Russell/Nasdaq rotation, while warning equities may stay choppy for the first half of the year.
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This interview centers on how markets are reacting to the Middle East conflict, rising oil and gas prices, tariff policy, inflation expectations, Fed rate cuts, and the rotation between large-cap tech and smaller domestic stocks. Jim Iuorio frames the recent gold selloff as mechanical selling and margin pressure rather than a fundamental change in the gold thesis. He says the broader market was already vulnerable because of a long stretch of strong equity returns and typical midterm-year volatility, and he views the current S&P pullback as part of that setup rather than a full trend break. On oil, he says crude was underpriced before the Iran-related shock because the market had already priced in a very resilient U.S. economy, tax cuts, deregulation, and domestic reinvestment. …
Near term, the setup is still fragile: oil spikes, higher breakevens, and geopolitical headlines can keep equities choppy and pressure risk appetite. Tactical patience makes sense until the S&P proves it can hold and rebuild above nearby resistance.
Over the next few weeks to months, the more likely path is a volatile consolidation rather than a trend collapse, with the market’s next leg depending on whether oil stays elevated and the Fed stays patient. If inflation proves temporary and the S&P stabilizes, he expects risk assets to recover and smaller caps to outperform.
Structurally, he sees a world of gradual fiat debasement, reserve diversification, and persistent liquidity support, which keeps gold and other real assets important. AI productivity and domestic reinvestment remain the counterweight, suggesting a long-run regime of growth with intermittent inflation scares rather than a clean disinflationary cycle.
The market was already set up for volatility before the Middle East conflict because of strong recent equity returns and typical midterm-year weakness.
He cites three average 20% gain years in a row, then lower forward returns and midterm-year volatility patterns.
The recent gold selloff was likely forced selling and margin pressure, not a deterioration in gold’s fundamental case.
He explicitly says the first-day drop was a margin-call situation and that the fundamental picture got stronger, not weaker.
Crude oil was underpriced before the Iran shock because the U.S. economy and policy mix were supportive of stronger demand.
He links crude strength to resilient growth, tax cuts, deregulation, and reinvestment rather than only geopolitics.
How should investors interpret the market's reaction to the Middle East chaos so far?
He says the market was already vulnerable because of prior strong years, midterm-year volatility, and a lack of conviction above key S&P levels. The Middle East conflict added to an already fragile setup, but he thinks the selloff is still modest and not a reason to abandon the bullish long-term view.
What is your current view on crude oil given Venezuela, drill-baby-drill, and the Iran shock?
He says Venezuela did not change the larger thesis because new supply would not be usable immediately. He thought crude was already too cheap in the $55-$60 range, and with lower prices and regulatory hurdles removed, the market is now moving toward a point where drilling becomes economically attractive again.
Where do you think inflation is heading, especially after the jump in gasoline prices?
He says the jump in oil and gasoline has raised inflation expectations, but he does not think it will materially affect inflation unless it lasts longer than a few weeks. He also argues the broader inflation backdrop is being pushed lower by AI-driven productivity and softer labor demand.
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