This one signal will confirm Iran war is now old news for stock market

• The S&P 500 must break above 6,901 to signal lows are in place; the index reached 6,885.94 on Wednesday but failed to punch through this psychological barrier
• Markets remain 'under-owned' with subdued sentiment, yet have absorbed shocks without breaching yearly lows, with US domestic production buffering against traditional oil shock narratives
• The index is 'trapped in the tightest range ever experienced' with Newton expecting resolution sometime in March, warning the eventual breakout will likely be explosive

Summary

Key Development: Markets are awaiting a critical technical signal to confirm geopolitical tensions from the Iran conflict have been fully priced in by investors.

The Signal: Fundstrat technical strategist Mark Newton identifies breaking above the S&P 500's Monday intraday high of 6,901 as the key buying indicator. On Wednesday, the index reached 6,885.94 but failed to breach this resistance level. A decisive move above 6,901 would signal that "lows are in place for the time being" and confirm bulls have regained control.

Market Context: Despite strikes that killed Iran's supreme leader and subsequent retaliation, U.S. stocks have shown surprising resilience. The S&P 500 is currently up approximately 35% from its 52-week low. Newton attributes this strength to an "under-owned" market with subdued sentiment and solid underlying economic fundamentals.

Supporting Factors: U.S. domestic energy production has buffered traditional oil shock concerns, helping markets "decouple" from worst-case geopolitical scenarios. The market has absorbed significant negative news without breaching yearly lows, suggesting investors are climbing the "wall of worry."

Outlook: Newton warns the S&P 500 is "trapped in the tightest range ever experienced," with resolution expected sometime in March. The eventual breakout—in either direction—is likely to be explosive. Until the 6,901 level is surpassed, the market remains in "suspended animation," and the Iran conflict will continue weighing on sentiment rather than becoming background noise for Wall Street.