BCA Research has described the recently reached U.S.-Iran ceasefire as a cautiously supportive development for markets, but the firm warned this week that the truce is fragile and may not hold. In a note circulated to clients, BCA's chief geopolitical strategist assigned a 40% probability that the ceasefire will collapse before the end of April.
Chief Strategist Peter Berezin said the temporary calm should lend near-term support to equity markets and prompted the firm to adopt a neutral stance on stocks over a short-term tactical horizon. Despite that tactical shift, BCA is keeping a 12-month underweight on equities, citing persistent geopolitical tensions and broader risks that could undermine the AI trade.
BCA's Chief Geopolitical Strategist Matt Gertken was explicit about the odds facing the agreement: "there is a 40% chance that the ceasefire blows up before the end of April, and a 60% chance it fails to survive for more than 12 months." The firm emphasized that important differences remain between the U.S. and Iran about what was agreed, suggesting the truce may have been negotiated hastily.
"There is still a large gap between what the US and Iran claim they agreed to, suggesting that the truce was reached quickly and hap-hazardly," BCA wrote. The research note singled out two areas of limited consensus as particularly significant: questions over nuclear enrichment and Israel's military operations in Lebanon.
BCA also drew attention to an unexpected element of the ceasefire framework involving the Strait of Hormuz. The note flagged U.S. President Donald Trump's apparent willingness to permit Iran to levy transit tolls through the strait. Berezin noted that Trump described that provision to ABC News as a potential "joint venture."
Beyond the geopolitical outlook, BCA warned that the AI trade faces structural challenges of its own. The firm argued that the very forces that make AI transformative are likely to exert downward pressure on technology profit margins over time, creating headwinds for the sector.
On monetary policy, BCA suggested market rate expectations remain overly hawkish irrespective of whether the ceasefire endures. The firm identified the U.S. dollar as likely to resume a weakening trend and described gold as a structural buy on dips.
The net position from BCA is one of guarded optimism for near-term market reaction to the ceasefire coupled with sustained caution over longer-term prospects. The firm is balancing a short-term neutral stance on equities with a longer-term underweight as geopolitical uncertainties, strategic concessions related to the Strait of Hormuz, and sector-specific pressure on tech margins continue to shape its outlook.