Can "peace" truly save the stock market? If so, why is Warren Buffett still holding the cash?

Today, Wall Street witnessed one of the most explosive "relief rallies" in recent history. Following whispers of a potential de-escalation in the U.S.-Iran conflict, the Nasdaq skyrocketed 3.8%, and the Dow Jones Industrial Average surged by a massive over 1,100 points. For retail traders who had been battered by weeks of geopolitical tension, it felt like the nightmare was over. The screens were green, and the volume was record-breaking.

However, ordinary investors are all rushing to buy, but Warren Buffett is doing the opposite. In his latest interview with CNBC this morning, he said: "currently, US stocks are not cheap and not suitable for bottom fishing". He holds a record-breaking $373 billion in cash. During yesterday's sharp rise, he didn't touch a single dollar. In fact, his current cash reserve is even higher than it was during the 2008 financial crisis.

Three Simple Reasons Why Buffett is Still Waiting

You might be wondering: "If the war is ending and the market is green, shouldn't I buy now?" Here is why Buffett is still holding his billions in cash instead of joining the crowd:

Peace doesn't fix "Too Expensive": Most traders are happy today because the war news is better. They think the "bad news" is gone. But Buffett doesn't look at news; he looks at the price tag. Right now, the total value of the stock market is over 220% of the U.S. economy (GDP). This is called the "Buffett Indicator," and it's at a record high. To him, the market is a giant bubble, and a little bit of "peace news" doesn't change the fact that stocks are fundamentally overpriced.

Cash is earning "Free Money" with No Risk: Why should Buffett take a risk in a shaky market when he can get paid to wait? Because interest rates are still high, his $373 billion is earning roughly $35 million in interest every single day just by keeping it in safe Treasury bills. That's over $13 billion a year in "free money" while he waits for a real crash. He isn't losing anything by staying out; he's actually winning while the market remains volatile.

Good Companies vs. Empty Hype: Yesterday, almost every stock went up because the "tide rose for all boats." But Buffett knows the difference between a real business and a bubble. He believes many companies that jumped 5% or 10% yesterday don't actually make any real profit. Once the "Peace Rally" excitement wears off, the companies without a real "foundation" will be the first to fall. He's waiting for the moment when the market stops acting on feelings and starts acting on facts.

The "Apple Twist": Is There Hope for High-Quality Stocks?

Here is where the story gets interesting. While Buffett is extremely cautious about the general market, he recently dropped a bombshell that flipped the script for many tech investors. Even though Berkshire Hathaway slashed its stake in Apple by about 75% recently, Buffett admitted that his love for the iPhone maker hasn't faded. In a surprising twist during his CNBC interview, Buffett admitted his timing wasn't perfect:Warren Buffett says he sold Apple too soon and would buy more of it, though not in this market

This admission creates a massive "reversal" in the logic. Buffett isn't saying that all stocks are bad. In fact, he called Apple a business that is "better than any business we own outright." He believes that "foundation companies"—the ones with deep moats, massive cash flows, and products that people literally cannot live without—are still worth a lot of money. The catch? Even a diamond is a bad deal if you pay ten times its value. Buffett still views Apple as the gold standard, but he is waiting for the market "noise" to settle so he can buy it at a price that offers a true margin of safety. This tells us that while the 1,100-point jump might be a "trap" for weak companies, the strongest companies in the world still have a bright future—if you can get them at the right price.

Investment Advice: Don't Be the "Exit Liquidity"

So, what should you do when you see a 3.8% jump and feel the urge to click "buy"?

Don't Chase the Crowd: If you didn't buy before yesterday's jump, don't rush in now. Buying because you're afraid of missing out (FOMO) is how most retail investors lose their money. The big players are often using these rallies to sell their stocks to you.

Focus on the "Foundation": Follow Buffett's lead. If you must invest, look for "foundation" companies that have a real product people can't live without. These are the companies that can survive a bubble popping.

Keep Your Own "Mini-War Chest": You don't need billions, but you should keep some cash on the side. Buffett is waiting for a real fire sale—a time when stocks are 30% or 50% cheaper. If you spend all your cash today on an expensive rally, you won't have anything left to buy when the real deals show up.

Conclusion

Today felt like a party on Wall Street, but Warren Buffett is already standing by the exit door. He isn't against peace, but he is strictly against overpaying for stocks. His message to the world remains firm: Currently, US stocks are not cheap and not suitable for bottom fishing. However, his "Apple Twist" proves one thing: quality still matters. Buffett is still a fan of the world's best businesses; he just refuses to be a "sucker" who buys during a sentiment-driven spike. If the man who has survived every crash since the 1950s thinks the general market is too expensive but still keeps his eye on the "best-in-class" giants, we should probably follow his lead. Stay patient, stay in cash, and wait for the real fire sale to begin.