Investing.com -- Asset management giant BlackRock has raised its outlook for U.S. stocks, citing contained impacts from the Iran war and strong corporate earnings expectations.

The firm, which manages $14 trillion for clients, said in its weekly market note that it raised the rating to overweight from neutral.

BlackRock said prospects for a lasting ceasefire have led strategists to believe the war's impacts won't be major. The firm had previously reduced risk exposure due to the conflict.

"We saw two signposts that would lead us to re-up risk after reducing it a few weeks ago. First, tangible evidence of actions that would reopen flows through the Strait of Hormuz. And second, visibility on the lingering macro impact being contained," the firm said.

The strategists added that expectations for corporate earnings have climbed for both the U.S. and emerging markets for 2026, even since the conflict began on Feb. 28.

With earnings season just getting underway, S&P 500 companies are expected to post a 12.6% profit increase in the first quarter, according to FactSet. If historical beat rates hold, that would rise to 19%, the forecasting firm said.

Technology profits are expected to grow 45% this year, yet the sector has seen only a marginal gain this year. BlackRock said this has put the valuation of information technology against the other 10 sectors at its lowest since mid-2020.

"We re-up risk in the U.S. and EM due to strong corporate earnings expectations and limited accrued damage to global growth," the strategists said. "We focus on profit margins this Q1 U.S. earnings season and still favor thematic opportunities like defense."

The U.S. and emerging markets are the only overweights BlackRock has in its equity portfolio.