The S&P 500 index could trade above the 9,000 level if the Iran War had not occurred, according to analysis by The Kobeissi Letter. The financial publication states that the current market environment presents a “historic opportunity” that could trigger a “violent rally” in equities.

The ‘Bull-Bear’ Market Paradox

The Kobeissi Letter notes that the S&P 500 is trading about 2% away from a record high despite oil prices exceeding $100 per barrel and inflation remaining above the Federal Reserve’s 2% target. The publication states the index is simultaneously near record highs while experiencing an internal bear market.

The Kobeissi Letter describes this phenomenon as a “Bull-Bear” Market. According to the analysis, 84% of S&P 500 constituents are trading at least 10% below their all-time highs. Furthermore, 59% of the stocks in the index are down at least 20% from their highs.

https://t.co/WahTIU665I

— The Kobeissi Letter (@KobeissiLetter) October 15, 2026

Market Concentration and ‘Deep Discounts’

The newsletter states that just 10 stocks have driven 70% of the index’s gains since its March 30 bottom. The Kobeissi Letter states that large-cap technology stocks have “deep discounts priced-in to their stocks,” maintaining that these equities would trade much higher absent recent macroeconomic factors.

“Without the Iran War, the S&P 500 could be at 9,000+,” the publication claims. The Kobeissi Letter asserts that ending the conflict and the global energy crisis would cause a “domino effect in the bullish direction.”

It also highlights that the S&P 500 posted 52% blended earnings growth in the second quarter of 2026, which The Kobeissi Letter says provides fundamental support for the artificial intelligence (AI) narrative.

Potential for a ‘Violent Rally’

The analysis states that the March 30 market bottom functioned as a “gift to investors” and notes that technology stocks were sold with “irrational price action.”

The Kobeissi Letter concludes that a “stealth” bear market has suppressed equity valuations. The publication expects that if market breadth widens and current macroeconomic headwinds are priced out, the current backdrop can “catalyze a violent rally in the S&P 500.”

How Has the Stock Market Performed?

The S&P 500 index has advanced 13.13% year-to-date. Similarly, the Nasdaq Composite index was up 14.93%, and the Dow Jones gained 8.56% YTD.

On Thursday, the SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq-100, respectively, closed mixed. SPY rose 0.28% to $771.79, while QQQ declined 0.13% to $728.00. Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), ended 1.08% higher at $521.18.

In premarket trading on Thursday, SPY was up 0.17%, QQQ fell 0.07%, and DIA advanced by 0.02%.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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