ABC News Daily Alan Kohler on why Trump’s war hasn’t spooked Wall Street
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May 4, 2026 
Alan Kohler, veteran Australian finance journalist and ABC finance expert. He discusses why Wall Street keeps hitting records despite the Iran war. He links AI-driven profit upgrades and energy gains to market optimism. He also explores inflation, RBA rate odds, and how geopolitical shocks could still upend markets.
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Rate Hikes Likely Even If Recession Looms
- The RBA and markets expect further rate hikes despite recession risks, with odds of a hike at 76% and possibly two or three more this year.
- Alan Kohler warns higher fuel prices push wage claims, forcing the RBA to raise rates and possibly cause unemployment to rise to tamp inflation.
AI Surge Is Powering Stock Market Gains
- Wall Street is hitting record highs primarily because of an AI-driven profit boom, not because geopolitical risks have vanished.
- Tech giants and AI firms are seeing massive revenue and productivity upgrades, lifting analyst forecasts across many companies.
Energy And AI Are Dual Market Tailwinds
- Two distinct sectors — AI/tech and energy — are both enjoying profit upgrades that support current market valuations.
- Energy firms profit from higher oil prices caused by the Iran conflict while AI boosts expected productivity and earnings elsewhere.