If Trump reaches an agreement with Iran, which sectors should you buy? Wolfe provides the answer.

Investing.com - According to a research report released by Wolfe Research on Tuesday, a potential diplomatic breakthrough between the U.S. and Iran could trigger a major shift in sector leadership.

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Analyst Chris Senyek pointed out that although the government’s stance on the conflict has been inconsistent, President Donald Trump’s decision to withdraw comments about striking Iran’s energy infrastructure helped boost the stock market on Monday, while oil prices fell sharply.

Senyek stated that Wolfe Research is “seeking further progress on the Iran issue to increase risk exposure,” and he believes that ongoing solutions “will pave the way for stock market gains.”

In this context, Wolfe Research recommends buying semiconductor, industrial stocks, and equally weighted non-essential consumer stocks.

According to the report, if the government indeed reaches an agreement, investors might “buy again into companies most related to AI trading (semiconductors, hardware, etc.).”

Senyek expects large tech stocks to attract strong capital inflows due to robust growth combined with “more attractive valuations.”

Wolfe Research also highlighted the potential shift in global capital flows. While resolving the issue would support global growth, the firm noted that, given international markets’ greater sensitivity to oil prices, they could face difficulties.

Senyek wrote that foreign investors will “reorient back to the U.S., specifically to Nasdaq/large-cap stocks,” as easing geopolitical risks will refocus attention on high-growth American tech stocks.

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