Stock market averages (^DJI, ^IXIC, ^GSPC) are declining ahead of Monday's closing bell while bond yields (^TYX, ^TNX, ^FVX) soar as the world waits to see if Israeli could launch a counterattack against Iran following the latter's air assault on Saturday, April 13.

SoFi Head of Investment Strategy Liz Young joins Market Domination to weigh in on whether geopolitical escalations could shake up markets that are already anxious for the first-quarter earnings season.

"We're in a place right now in the market where we are priced for a pretty good environment, and that doesn't necessarily make that super risky, but what it does say is that earnings have to come through at least as strong as investors expect them to, if not stronger," Young says about her general earnings season outlook. "We've already seen with some of the banks that if guidance isn't as strong as investors want it to be, they've been punished."

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Luke Carberry Mogan.

Video Transcript

- Stocks, as I just pointed out, are near the lows of the day. Investor sentiment tipping back toward fear-rising tensions in the Mideast from strong economic data here at home. Bond yields have been surging as the world waits on how Israel will retaliate against that unprecedented strike from Iran. Israel's military Chief of Staff saying there will be a response of some kind.

Joining us now, Liz Young, SoFi Head of Investment Strategy. Liz, thank you so much for being here. Obviously, a lot to sift through today. You've got the headlines coming from the Mideast. You have that stronger than expected economic data here. Oh, and by the way, it's also earnings season. So how are you thinking about all these issues?

LIZ YOUNG: There's a lot going on out there. And this day so far has been complete whiplash. We began it really with the relief of maybe not an escalated tension in the Middle East, and then gave all of that back pretty much when we found out that maybe it isn't over after all. So it's hard to argue that after last weekend, things have gotten better. But we are heading into the busier part of earnings season, where we'll get really the data from companies that the rubber hits the road.

I think we're in a place right now in the market where we are priced for a pretty good environment. And that doesn't necessarily make that super risky, but what it does say is that earnings have to come through at least as strong as investors expect them to, if not stronger. We've already seen with some of the banks that if guidance isn't as strong as investors want it to be, they've been punished. So if that theme persists throughout earnings season, the multiple on the S&P right now could be at risk.

- And Liz, bring it back, I mean, geopolitics front and center today. And the world to a lot of folks, Liz, right now probably looks fragile. And it's not just Israel, Iran, it is Russia, Ukraine, it is China, Taiwan, It is Israel, Hamas. As a strategist, Liz, how do you think through these geopolitical tensions?

LIZ YOUNG: Yeah, I mean, it's difficult to step back and try to take just a purely investment take on it. But something that was going on even before the heightened risk over the weekend was that there was a lot of currency volatility. We have Central Banks around the globe starting to move in different directions, which just raises the risk of currency volatility, and it just raises the question marks. We have really big regions thinking about moving in different directions.

We've got Japan on the upswing, we've got the US maybe at some point, cutting rates. But that just does, it raises all of those bumps in the road in currencies. So that's, first and foremost, what I watch as a strategist. You also watch things like gold, which we know has been on an absolute surge this year, and commodities. And commodities and gold are something that are traded around the globe, and they're important to a lot of global nations in different ways.

They're also important to inflation, and the trajectory of inflation. And what we've seen, regardless of the fact that we've been seeing inflation, growth in inflation come down, we've seen commodities surge this year, which puts a lot of pressure, particularly on the Fed to stay tighter and higher for longer-- and that affects a lot of the globe as well.