By Chuck Mikolajczak

NEW YORK, May 21 (Reuters) -

EXPECT STRAIT OF HORMUZ TO OPEN SOON AS ECONOMICS BEATS POLITICS - PENCE WEALTH

As crude prices have surged following the start of the Iran war at the end of February to over $100 a barrel and sparked concerns about a resurgence of inflation pressures, Dryden Pence, Chief Investment Officer for Pence Wealth Management, says strong earnings should continue to lift stocks.

In an interview with Reuters this week, Pence said that for the year, he expects stocks to run up another 10% from current levels and while the war has increased market turbulence, "we look at as opportunities rather than fear, because if the fundamentals are there, sooner or later, fundamentals win," and that "economics beats politics every time if you just give it enough time."

Iran's Supreme Leader has issued a directive that the country's near-weapons-grade uranium should not be sent abroad, two senior Iranian sources told Reuters, hardening Tehran's stance on one of the main U.S. demands at peace talks.

With 452 companies in the S&P 500 .SPX having reported results through Friday, earnings growth for the quarter is tracking at 28.3%, according to LSEG data, with 83% topping analyst estimates.

Another factor that could help mitigate inflation pressures is increased labor productivity from AI, said Pence, who noted that the build out of the technology is still in its early stages and will result in some winners and losers, "but in the end, it's all going to get used."

Pence has Microsoft MSFT.O, Meta Platforms META.O and Nvidia .NVDA.O as his top picks in the AI space.

Another factor that could ease price pressure are the upcoming midterm elections, which could push President Trump toward making a deal to end the war.

"Just like Iran is out of time because they're out of money. Trump is out of time because he's out of time for the elections," said Pence.

"Something's going to happen here within the next several weeks and you're seeing that pressure come back because again, economics beats politics."

(Chuck Mikolajczak)

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