(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

LONDON, April 28 (Reuters) - Dissonance between

record-high stocks and a geopolitical shock puzzles many, and a

common narrative is that investors are "seeing through" the Iran

conflict. But there's another take: this is just the sort of

world we're now stuck in, and blow-by-blow events matter less

than mega-trends and long horizons.

In an event-packed week like this, arguments cut both ways.

Sky-high oil prices are real and do matter - but they could,

and have, also dropped 15% to 20% in an hour in this frenetic

war environment. Energy experts may fret about intrinsic,

long-lasting damage to the physical energy market - but stock

and bond markets ruthlessly price forward and assume eventual

"normalisation" regardless.

There's little doubt that concepts of "polycrisis" or

"permacrisis" are gaining ground - not just in politics and

international relations but also how markets and underlying

economies are being forced to cope.

A new world of rivalry, competition, conflict and tension

may just see greater risk simmer and persist.

That's easy to conceive of after Donald Trump's first year

back in the White House. The 15 months since his inauguration

have seen the world pinballed from a U.S.-sown trade shock to

domestic institutional upheavals and a geopolitical

rollercoaster in 2026 so far - involving both real and

threatened U.S. interventions in Venezuela, Greenland and Iran.

Investors might try to "see through" the two-month-old Iran

war. But even if that flashpoint cools, we are likely to return

to Washington's recriminations against NATO allies who refused

to join the U.S.-Israeli attacks on Tehran.

A potential end to the 77-year transatlantic alliance comes

as the Ukraine war moves through its fifth year.

Next month's U.S.-China summit also becomes a lightning rod.

An artificial intelligence and tech arms race between the two

biggest economies suggestsboth are digging in for a long and

intensifying rivalry on numerous fronts.

'UN-ORDER' RATHER THAN DISORDER

If this were all down to Trump, the electoral cycle may

bookend it. But the shape of this world has been emerging

whether he's been in office or not, with the pandemic a critical

catalyst for the retreat of once-dominant globalization.

Mark Leonard at the European Council on Foreign Relations

think tank nuances this emerging state of affairs as a more

chaotic global "un-order" rather than "disorder" sown by a

deliberate upending of a rules-based international system.

Writing in Project Syndicate, Leonard argues that "un-order"

emerges when norms are overtaken by events, leaving "a deeper,

irreducible uncertainty" in their place - a system "beset by

episodic bursts of coercion and retaliation."

He warns that Europe's reliance on rules-based structures

leaves it vulnerable, and reckons global crises are becoming

"more complex, less predictable, and potentially catastrophic,"

and often bleed into one another and amplify uncertainty.

POLLYANNAS OR POLYCRISIS?

Or perhaps markets are not in denial at all - but are simply

pricing in a world where defence, tech and energy dominance

become a spur to some major economies.

Whatever the political solutions or even the trajectory of

all this, it's a world you would instinctively assume economies

and markets would balk at - a world riven with financial

volatility and cowering savers.

That has not happened. This is a world of still-steady GDP

growth, even expanding trade despite the U.S. tariffs, and

tech-driven stock prices at historic highs.

A world of conflict in which national defense and security

are bound up with tech, AI, computing, cyber shields, drones and

even space means total global demand for inputs, and the energy

to drive it, goes up several notches compared with the

one-size-fits-all U.S.-led tech world of yesteryear.

If tech leadership and innovation are as important to

economic and military dominance as this more dangerous world

supposes, then national champions and key industries will not be

allowed to fail.

As Societe Generale's Andrew Lapthorne points out, almost

half the gains in MSCI's all-country stock index

this year have been driven by just two sectors:

chips and tech hardware. Of the near $400 billion rise in

full-year consensus profit forecasts, 98% comes from chips, tech

hardware and energy.

Twelve-month forward profits are $600 billion higher than

four months ago, a 12% increase and now the largest upward

revision on record outside of a post-recession recovery,

Lapthorne told clients.

Beyond tech, the scramble for relatively scarce resources,

metals, rare earths and broad commodities meets repeated supply

crunches - adding inflationary pressure at the margins.

What gets lost is the "peace dividend" and low inflation of

the globalization decades, heaping pressure on already stretched

government funding and sovereign bond markets.

That is where the weakness in this new world resides. Would

a debt crisis put all the other crises back in their box and

prompt a re-embrace of old norms?

Fiscal dominance and financial repression - governments

effectively suppressing borrowing costs to manage debt burdens -

are probably more likely.

Volatile? Not really - at least not on the measures

typically watched.

Wall Street equity volatility gauges such as the VIX

sit near their long-term averages of the past four decades.

Even bond market volatility gauges seem resigned to

governments cosseting their funding markets, with the U.S.

Treasury measure back below 25-year averages.

In this brave new world, the biggest risk is still a

bubble.

(The opinions expressed here are those of Mike Dolan, a

columnist for Reuters.)

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