US Stocks Close at Record Highs on Peace Hopes: Markets Wrap
(Bloomberg) — US stocks closed at record highs on Wednesday, as a potential peace deal in the Middle East and a strong start to corporate earnings season stoked investor optimism.
The S&P 500 finished the day up 0.8%, extending a dramatic two-week surge from its late March lows. The tech-heavy Nasdaq 100 was up 1.4%, also a record. Bank of America Corp. and Morgan Stanley rose as their equity traders posted strong revenue beats.
Hopes that peace efforts between the US and Iran will succeed have pushed investors to increasingly price out the risk premium built up since the conflict started in late February and renew their focus on artificial intelligence and Corporate America’s resilience.
The warring sides are considering a two-week ceasefire extension to allow more time to negotiate a peace deal, according to a person familiar with the matter, reducing the prospect of a return to fighting despite an intensifying standoff over the Strait of Hormuz.
“Stocks are basically expressing their view that the war in the Persian Gulf is all but over,” wrote Steve Sosnick, chief strategist at Interactive Brokers LLC.
Brent rose 0.1% toward $95 a barrel as the US pressed ahead with a naval blockade of the Strait of Hormuz. Treasuries slipped, with the two-year yield rising to 3.76%. The dollar was lower while gold fell toward $4,800 an ounce.
Investors have been piling back into stocks even as there remains little clarity around the trajectory of the war, which has choked off around a fifth of global crude supplies and risked a surge in inflation that could still prompt central banks to tighten policy.
Technology shares in particular have been snapped up after lagging the market for much of the year. A popular exchange-traded fund that tracks the software industry was up around 4% on Wednesday. Oracle Corp. soared 4.2% and Microsoft Corp. rose 4.6%.
“It looked like a rotation day today within the tech sector, as investors sold the high flying chip stocks and bought the beaten down software names,” said Matt Maley of Miller Tabak. “That said, after such a big run, we could see a near-term breather in the tech sector, but that would be normal and healthy.”
Earnings Watch
Technical analysts, who study charts for clues on stock moves, said some indicators of market health are painting an optimistic picture.
“While we believe it is prudent to maintain a healthy sense of skepticism regarding this headline-driven optimism, underlying breadth and trend indicators are improving off March lows, or at least until the next headline proves otherwise,” according to Craig Johnson at Piper Sandler.
With the earnings season now in full swing, investors will watch for signs of whether the conflict is denting the outlook for earnings and whether corporates and consumers are cutting back on spending amid the uncertainty.
“We continue to see healthy potential for a rally for the remainder of this year from the current S&P 500 levels amid solid profit growth and a supportive macroeconomic backdrop,” said Ulrike Hoffmann-Burchardi, CIO Americas and global head of equities, UBS Chief Investment Office.
What Bloomberg Strategists Say:
“US stocks have played a key role in the global equity rebound, with the S&P 500 once again climbing above the 7,000 milestone level. Yet valuations show they have not truly fully shaken off the shock. A return to pre-war multiples of 21.3x forward earnings implies a move past 7,200, or about 3% higher from current levels.”
— Tatiana Darie, macro strategist. For the full analysis, click here.
Corporate News:
Jane Street Group has taken an additional $1 billion stake in AI cloud services provider CoreWeave Inc. and plans to spend about $6 billion on the company’s technology offerings. Morgan Stanley’s stock traders joined the rest of Wall Street with a record-breaking first quarter. Bank of America Corp.’s traders pulled in the business’s highest quarterly revenue in more than a decade, riding a wave of volatility that pushed the firm’s stock-trading desk to an all-time record. Allbirds Inc., the once-buzzy maker of wool sneakers valued at more than $4 billion in its heyday, announced a new business plan just days before it planned to close down for good: AI computing infrastructure. Bank of America Corp.’s stock-trading desk set a record, riding a wave of volatility that helped push the bank’s earnings to the highest in nearly two decades. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.8% as of 4:05 p.m. New York time The Nasdaq 100 rose 1.4% The Dow Jones Industrial Average fell 0.1% The MSCI World Index rose 0.5% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1797 The British pound was unchanged at $1.3567 The Japanese yen fell 0.1% to 158.99 per dollar Cryptocurrencies
Bitcoin rose 1% to $74,884.04 Ether rose 2.4% to $2,370.32 Bonds
The yield on 10-year Treasuries advanced three basis points to 4.28% Germany’s 10-year yield advanced two basis points to 3.04% Britain’s 10-year yield advanced three basis points to 4.81% Commodities
West Texas Intermediate crude fell 0.2% to $91.14 a barrel Spot gold fell 1% to $4,794.10 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric.
©2026 Bloomberg L.P.
