Investors are a bit too blase in shrugging off the military turmoil in Ukraine and the Mideast, says former Pimco CEO Mohamed El-Erian.
The thinking in financial markets is that the conflicts are isolated enough so that they won't affect major economies and companies, he tells
CNBC.
The Dow Jones Industrial Average hit a record high of 17,151.56 Thursday, and the S&P 500 reached an all-time peak of 1,985.59 July 3.
Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!
Investors' "notable complacency" has paid off thanks to the Federal Reserve's massive easing program, El-Erian explains. "Because the Fed is standing by the markets, there's a reason to fade [buy] any selloff," he said.
"But the problem is if you step back, the process is getting worse. It involves non-state actors, which means it's much harder to contain. Unlike the old days, there is no outside power that informs, influences or imposes outcomes."
In particular, the Israel-Hamas spat risks "radicalizing people around the region," he argues. "The minute you start talking about [that], you bring in Iraq, you bring in Syria, you bring in other countries."
But others see it differently.
"Investors are learning that it's a loser's game to sell on the news," Jim Paulsen, chief investment strategist at Wells Capital Management, tells
The Wall Street Journal. Recent developments "don't give you a sense that they're going to turn into some wider conflict."
Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!
© 2026 Newsmax Finance. All rights reserved.