Niall Ferguson: Markets are trading like the war is over
Plans have been published for a giant, gold-bedecked victory arch that has already been nicknamed the Arc de Trump.
From all of this it might reasonably be inferred that the “Seven Weeks’ War” has concluded.
How are we to make sense of this? Since the war began, I have written essays warning of 1) the danger that the conflict goes global, 2) the risk of recession if the conflict is protracted, and 3) the nightmare that this is the American version of the 1956 Suez Crisis.
Either Wall Street has canceled all its subscriptions to The Free Press, or I am missing something.
I can offer three possible explanations
3. Mr. Market is as clueless as he was in July 1914, September 1929, December 1972, August 2000, October 2007, and February 2020—all months when stocks reached highs shortly before reality struck devastating blows.
Where we go from here is fairly predictable. I would be surprised if Trump now deploys ground forces. There will be more negotiation and the final compromise will take longer to be agreed upon than Mr. Market currently believes.
The transatlantic alliance may be the most significant casualty of this war. Most Europeans and Brits don’t yet realize just how much their leaders have blown it in Washington.
U.S. precision-missile stocks have been drastically depleted.
That brings me to theory three: Mr. Market can be very wrong.
Twenty years ago, I published a scholarly article about the European bond market in the summer of 1914.
I asked why the outbreak of World War I—an event traditionally seen as having been heralded by a series of international crises—was not apparently anticipated by investors.
To investors such as the Rothschilds—supposedly the best-informed people in the world at that time, as their Wall Street counterparts are today—World War I truly came as a bolt from the blue.
There is a lesson here, and it is not “the wisdom of crowds.
Niall Ferguson 20 April.2026
Niall Ferguson
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