Excessive Optimism: European equities declined over the past week, while the S&P 500 remains roughly at the same level as before the outbreak of the war in the Middle East. The relatively stronger performance of U.S. equities over the past week is understandable to some extent. Oil prices have risen sharply, and the United States is largely self-sufficient in energy, whereas Europe relies heavily on imported oil and gas. The question, however, is why U.S. equities have not declined at all. Several explanations may account for this: