President Trump’s four- to five-week projection for the military campaign against Iran is being met with caution but not panic on Wall Street, according to First Trust chief economist Brian Wesbury, who said market movements reflect valuation concerns and political uncertainty more than fear of a prolonged war.
Speaking on Chicago’s Morning Answer with Dan Proft, Wesbury compared the current market reaction to the early days of the Iraq War in 2003, when stocks rallied sharply after initial strikes began. At that time, he noted, the S&P 500 had already endured a steep decline following the dot-com crash and was trading at undervalued levels. The onset of military action, he said, acted as a catalyst for recovery rather than a source of fresh anxiety.
Today’s environment is different, Wesbury argued. Instead of emerging from a major correction, markets are coming off an extended bull run and appear stretched by historical standards. In his view, the current sideways pattern—roughly two years of limited net progress—reflects elevated valuations that make investors more sensitive to geopolitical shocks.
Over the weekend, markets initially dipped as news of the Iran strikes broke, but technology-heavy indexes finished mixed as reports suggested U.S. operations had significantly damaged Iranian leadership and infrastructure. Wesbury said that early perception of operational success likely softened what might otherwise have been a sharper selloff.
Still, he pointed to two sources of pressure: questions about Iran’s remaining capabilities and signs of political friction within Trump’s broader coalition. Wesbury said uncertainty over how long the campaign might last—and whether domestic political support will hold—creates an overhang that markets must price in.
He emphasized that markets respond not only to battlefield outcomes but also to perceptions of resolve and clarity of objectives. Trump has repeatedly framed the mission narrowly, stating that Iran must be prevented from rebuilding nuclear capabilities and that the United States will not enter an open-ended conflict. Wesbury said clearly defined goals help reduce the risk of the kind of drawn-out engagements that unsettled investors during Iraq and Afghanistan.
Proft suggested that Iran’s retaliation so far has appeared limited and that regional alignment—including cooperation from Gulf states—signals strategic consolidation rather than escalation. Wesbury agreed that broader geopolitical realignment could ultimately prove constructive if the campaign achieves its objectives without expanding.
Zooming out, Wesbury framed the Iran conflict as part of what he called a broader strategic reset. He argued that the United States has faced pressure from three distinct forces in recent decades: expansive international regulatory bodies, authoritarian adversaries such as China and Iran, and transnational criminal networks. In his view, Trump’s foreign and domestic policies seek to push back against each of those forces by reducing regulatory burdens, confronting hostile regimes, and targeting cartels and illicit activity.
Wesbury acknowledged that such efforts carry economic volatility. He said uncertainty is likely to weigh on markets in the near term, especially given what he described as an overvalued equity landscape. A modest pullback, he argued, should not be interpreted as systemic failure but as a rational adjustment to geopolitical risk.
He also reiterated his longstanding criticism of large-scale global climate spending, calling it economically inefficient and emblematic of what he views as misplaced policy priorities over the past decade. In his telling, the redirection of capital away from heavily subsidized sectors and toward productive enterprise aligns with a broader push for economic growth rooted in deregulation and market freedom.
While Proft characterized the current period as a “common sense counterrevolution,” Wesbury described it as a struggle between entrepreneurial capitalism and what he sees as anti-growth forces. He invoked a metaphor from Gulliver’s Travels, suggesting that layers of regulation and geopolitical threats act like threads restraining economic dynamism. The challenge, he said, is unwinding those constraints without triggering instability.
For investors, Wesbury’s message was measured. He does not see current declines as catastrophic, but he warned that elevated valuations mean markets lack the cushion they had in 2003. Whether stocks regain upward momentum will depend on how events unfold on the ground in Iran and whether the administration maintains both strategic clarity and political cohesion.
In the meantime, he said, volatility should be expected—but not mistaken for collapse.