Pomegra
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Markets Reclaim Record Territory After Two-Month War-Driven Selloff
The S&P 500 gained 30.48 points, or +0.44%, to 6,997.86 in midday trading on Wednesday — coming within a single session of formally closing above its prior all-time high of 7,002.28. The Nasdaq Composite surged 246.98 points, or +1.05%, to 23,886.07, extending a powerful nine-session winning streak. The Dow Jones Industrial Average lagged slightly, slipping 189.47 points, or -0.39%, to 48,346.52, weighed down by materials sector weakness.
The intraday record high marks the first time the S&P 500 has tested its January peak since the U.S.-Iran war erupted in late February 2026 — a conflict that erased more than $2 trillion in U.S. market capitalization at its worst point and pushed oil prices to 31% above pre-war levels, rekindling inflation fears and complicating the Federal Reserve's interest-rate path.
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Peace Signals Override Geopolitical Uncertainty
The primary catalyst behind Wednesday's rally is growing market conviction that the U.S.-Iran ceasefire — which took hold last week — is morphing into a permanent peace arrangement. President Donald Trump stated in a Fox Business interview aired Wednesday that the war is "very close to over," even as the U.S. Strait of Hormuz blockade technically remains in effect.
"The markets don't need a finished deal to rally. All they need is evidence that talks will happen," said Shay Boloor, chief market strategist at Futurum Equities. "They are willing to digest all of this overseas heartburn because AI is so real and the rate of change is so exponential that it's too egregious to be on the sidelines and not participate."
The CBOE Volatility Index (VIX), Wall Street's fear gauge, dropped to 18.06, reflecting materially improved sentiment. The S&P 500 has climbed more than 2% this week alone, putting it on course for its third straight week of gains — the kind of winning streak not seen since October 2025.
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Bank Earnings Season Delivers Broad Upside Surprise
The macro optimism was amplified by a robust start to the Q1 2026 earnings season, with Wall Street's largest financial institutions reporting better-than-expected profits.
Bank of America (BAC) shares rose 1.9% after the second-largest U.S. lender reported growth in first-quarter profit, driven by strength in its trading division. Morgan Stanley (MS) climbed 4.4% — and was up as much as 5.5% intraday — after delivering a jump in quarterly profit on the back of strong dealmaking and trading revenue. Earlier in the week, Goldman Sachs (GS), JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C) all delivered results, collectively reinforcing the Wall Street consensus for double-digit S&P 500 profit growth in Q1. The S&P 500 Financial Index gained 0.6% on the session.---
Tech and AI Stocks Extend Dominant Leadership
The S&P 500 Information Technology Index rose 1.5% Wednesday, sustained by a fresh wave of AI-related deal flow and a continued rotation into software stocks. Six of the Magnificent Seven advanced, with only Amazon (AMZN) sitting out the move.
Meta Platforms (META) climbed 1.5% after extending its custom AI chip partnership with Broadcom (AVGO) — a deal significant enough that Broadcom CEO Hock Tan agreed to step down from Meta's board to take on a special advisor role. Broadcom surged 3.1%, bringing its year-to-date gain to 14%. Oracle (ORCL) emerged as the week's standout performer, surging 18% over two sessions on the back of an expanded data center power deal with Bloom Energy (BE) and the launch of a new suite of agentic AI products. Meanwhile, quantum computing stocks staged a dramatic move, with Rigetti Computing (RGTI) gaining 11.8%, D-Wave Quantum (QBTS) soaring 15.9%, and Arqit Quantum (ARQQ) surging 18.8%.---
Fed Uncertainty and IMF Warning Loom in Background
Not all signals are uniformly bullish. Federal Reserve Bank of Cleveland President Beth Hammack stated Wednesday that while she sees no imminent need to alter the federal funds rate target, the central bank retains optionality for both rate cuts and hikes depending on how the energy-price-driven inflation picture evolves.
Adding a note of caution, the International Monetary Fund cut its global growth outlook Tuesday, warning that a prolonged conflict could push the world economy to the brink of recession. Oil prices, while ticking lower on Wednesday — with West Texas Intermediate (WTI) at $90.40 a barrel and Brent crude at $94.20 — remain elevated. The 10-year Treasury yield edged higher to 4.28%, reflecting lingering inflation vigilance.
The Trump-Powell standoff also resurfaced Wednesday, with President Trump renewing threats to fire Fed Chair Jerome Powell in connection with an ongoing Justice Department investigation over alleged cost overruns in the Fed's headquarters renovation.
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Broader Market Breadth and the Road to 7,000
Advancing issues outnumbered decliners by a 1.2-to-1 ratio on the Nasdaq and a 1-to-1 ratio on the NYSE. The S&P 500 posted 10 new 52-week highs against just one new low. The Russell 2000 small-cap index also advanced, providing additional confirmation of broad market participation in the rally.Snap (SNAP) surged nearly 8% after announcing it will cut approximately 1,000 employees — 16% of its global workforce — citing rapid AI advancements and a push to accelerate profitability. Netflix (NFLX), up 13% year-to-date, is set to report earnings Thursday, with options markets pricing a swing of up to 6% in either direction.
The S&P 500 closed at its first intraday record high since the U.S.-Iran war began, and all eyes now turn to whether a formal peace agreement and continued earnings beats can sustain momentum toward — and beyond — the 7,000 milestone. Analysts at Barclays characterized the current environment plainly: "The market is trading assuming we have seen the worst of the conflict."
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Mentioned tickers: SPX, SPY, DJI, IXIC, BAC, MS, GS, JPM, WFC, C, META, AVGO, AMZN, ORCL, BE, RGTI, QBTS, ARQQ, SNAP, NFLX, VIX
