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Many investors might have expected the stock market to have crashed by now, given the Iran conflict and rocketing oil prices. So why hasn't it happened? This resilience will come as a relief to pension savers, retirees in drawdown and those holding Stocks and Shares ISAs, but it does not mean the risks have gone away.

Daniela Hathorn, senior market analyst at Capital.com, said markets appear to be taking a "wait and see" approach to Iran. "The reaction remains notably restrained, suggesting investors are still operating with a glass-half-full mindset." She said markets are effectively betting on calm returning: "The prevailing view appears to be that the situation will ultimately de-escalate."

Investors are hoping the conflict will not do lasting damage to company profits or the wider economy. But that optimism could be tested if energy prices stay higher for longer.

Tom Stevenson, investment director at Fidelity International, said investors are now at a fork in the road. "With many stock markets standing close to all-time highs, it is totally unclear where they will head next."

Strong company earnings, particularly from artificial intelligence investment, are supporting investor optimism for now. "The surge in AI-related capital expenditure is helping to fuel an earnings boom."

The oil price has climbed to more than $120 a barrel, up from $60 at the start of the year. Analysts Macquarie Group warning that it could hit potentially $200 by June, unless the conflict is resolved.

Stevenson warned: "A prolonged spike in oil could push up inflation and damage growth, creating a stagflationary shock, which would be bad news for both shares and bonds."

Short-term stock market volatility is nothing new and often short-lived. Selling in panic can backfire by locking in losses just before a rebound.

But today's stability rests on assumptions about the conflict and energy prices that could suddenly prove mistaken. The crash could still come.