S&P 500 Wipes Out 2026 Loss on Iran Deal Hopes: Markets Wrap

(Bloomberg) — Stocks closed at session highs and were back in the green for 2026 after President Donald Trump said Iran still wanted to make a deal following a deadlock in peace talks and a US blockade of the Strait of Hormuz. Meanwhile, Goldman Sachs Group Inc. shares dropped in an underwhelming start to the earnings season.

The S&P 500 rose 1% to its highest level since late February. Brent crude was up 3% at around $98 a barrel, paring earlier gains. Goldman retreated 1.9% as a revenue miss in fixed-income, currency and commodities outweighed a record haul from equities.

Equities extended their rally after Trump said Iran reached out to his administration over peace negotiations even as the US began a naval blockade of the Strait of Hormuz in the war’s seventh week.

“The oil retracement, in combination with bearish positioning, has fueled the equity rebound,” said JonesTrading Chief Market Strategist Michael O’Rourke. “Overall, investors doubt the veracity of headlines, but they don’t want to be caught on the wrong side of them either.”

Even as Trump sought to jawbone negotiations back on track, there were few signs that was taking place after weekend talks failed in Islamabad. Iran blamed the deadlock on the US and Tehran has not confirmed further discussions on Monday.

“Given the economic costs of higher oil prices and with the immediate turn of events highly uncertain, we think investors should avoid attempts to “trade” geopolitics,” wrote Ulrike Hoffmann-Burchardi, CIO Americas and global head of equities at UBS Global Wealth Management.

At the same time, investors are eager to hear from executives about risks stemming from the war, the disruptive impact of artificial intelligence and worries over private credit as earnings season begins. Analysts project S&P 500 earnings will show roughly 12% annual growth for the first quarter.

The question is whether “this upcoming earnings season can be enough of a catalyst to dismantle the close link between stocks and oil, as corporate earnings are what traditionally drive stock prices,” wrote Clark Bellin, president and chief investment officer at Bellwether Wealth.

For Morgan Stanley strategist Mike Wilson, a strong earnings backdrop is protecting the S&P 500 from deeper losses, and he recommends that investors stand ready to add risk even if the Iran conflict continues.

The yield on two-year Treasuries slipped to around 3.77%. The dollar reversed an earlier gain and was down 0.2%. Gold traded lower, near $4,765 an ounce.

The latest spike in crude, coupled with the marked rise in March US consumer prices, is shifting the bond market’s focus back to inflation. Japan’s 10-year yield climbed to the highest level since 1997 earlier on Monday before paring the move. In the US, money markets pointed to less than a one-in-five chance of a rate cut by December.

“Time is playing against markets as each day that goes by with oil prices this high weighs on global growth and pushes inflation,” said Gilles Guibout, head of European equities at BNP Paribas Asset Management. “It’s difficult to see how markets could stage a sustainable rebound without a sustainable solution to this crisis.”

What Bloomberg Strategists Say:

“Crude isn’t back to its March highs yet, whether you look at the generic prompt ticker or the specific front-month delivery dates for Brent or WTI. That would argue against a catastrophic lurch lower in stock prices.”

— Cameron Crise, Macro Strategist, Markets Live. For the full analysis, click here.

Corporate Highlights:

Bill Ackman has kicked off formal marketing for the US initial public offering of his closed-end fund and his hedge fund, even as the Iran war hits dealmaking optimism. Somnigroup International Inc. agreed to buy bedding company Leggett & Platt Inc. in an all-stock transaction worth about $2.5 billion. Sandisk Corp. shares gain as the memory chipmaker is set to join the Nasdaq 100 index. Goldman Sachs Group Inc. is “supplementing” its cyber and infrastructure resilience after regulators warned the largest US banks about the latest artificial intelligence model from Anthropic PBC, Chief Executive Officer David Solomon said. Some of the main moves in markets:

Stocks

The S&P 500 rose 1% as of 4:02 p.m. New York time The Nasdaq 100 rose 1.1% The Dow Jones Industrial Average rose 0.6% The MSCI World Index rose 0.8% Currencies

The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.3% to $1.1761 The British pound rose 0.3% to $1.3506 The Japanese yen was little changed at 159.39 per dollar Cryptocurrencies

Bitcoin rose 2.8% to $73,375.13 Ether rose 2.1% to $2,260.66 Bonds

The yield on 10-year Treasuries declined three basis points to 4.29% Germany’s 10-year yield advanced three basis points to 3.09% Britain’s 10-year yield advanced three basis points to 4.87% Commodities

West Texas Intermediate crude rose 1.7% to $98.23 a barrel Spot gold fell 0.2% to $4,742.21 an ounce This story was produced with the assistance of Bloomberg Automation.

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