Wall Street Roars Back to Record Highs on Peace Hopes

Stocks surge as Iran conflict nears resolution and software stocks rebound

Apr. 18, 2026 at 2:13pm

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A dramatic close-up of interlocking gears, cogs, and levers in a high-contrast black and white industrial style, representing the complex machinery of global finance and the resilience of the stock market.The stock market's rapid recovery from near-correction levels reflects the resilience of the financial system and the optimism of investors in the face of geopolitical tensions.Washington Today

The S&P 500 closed above 7,100 for the first time, completing its fastest turnaround since 1990, as investors priced in an end to the Iran-U.S. conflict. Solid bank earnings and a comeback in the beaten-down software sector also fueled the market's remarkable rally.

Why it matters

The swift market rebound highlights investors' optimism about a potential resolution to the geopolitical tensions that had weighed on stocks in recent months. The resurgence of software shares also signals a shift in sentiment around the impact of AI on established tech companies.

The details

The S&P 500 jumped 4% last week, while the tech-heavy Nasdaq rose 6% and the Dow Jones Industrial Average increased 1.7%. Investors were buoyed by signs of progress in negotiations between the U.S. and Iran, including President Trump's comments that the war was "very close to over." Bank earnings also painted a picture of a resilient consumer, with strong credit card spending and new account openings. Meanwhile, beaten-down software stocks like Microsoft, CrowdStrike, and Salesforce rebounded as fears around AI's impact on their business models eased.

  • On Tuesday, another round of negotiations between Washington and Tehran took place.
  • On Wednesday, President Trump told Fox Business that the war was "very close to over."
  • On Thursday, Trump announced a ceasefire deal between Israel and Lebanon.
  • On Friday, Iran declared the Strait of Hormuz was "completely open."

The players

Donald Trump

The President of the United States who announced progress in negotiations with Iran and a ceasefire deal between Israel and Lebanon.

Venu Krishna

A strategist at Barclays who noted the S&P 500's record-setting turnaround from near-correction territory.

Jim Cramer

The host of CNBC's Mad Money who discussed the potential for a rotation into stocks pressured by the Iran-U.S. conflict.

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What they’re saying

“Now the Fed has the chance to be able to cut rates under Kevin Warsh. So, what we're seeing is a move back into things that have really lagged.”

— Jim Cramer, CNBC Host

“Consumers and small businesses remain resilient.”

— Jeremy Barnum, CFO, JPMorgan

“Consumers are spending more than a year ago, which includes spending more on gas, but they haven't slowed spending on everything else.”

— Charlie Scharf, CEO, Wells Fargo

What’s next

Investors will be closely watching for any further developments in the Iran-U.S. conflict and the impact on the markets. Additionally, the Federal Reserve's next move on interest rates under potential new leadership will be a key factor in the market's direction.

The takeaway

The market's remarkable rebound from near-correction territory to record highs in just 11 trading days highlights the power of investor optimism around geopolitical de-escalation and the resilience of the consumer. However, the road ahead remains uncertain, with the Fed's policy decisions and the durability of the software sector's comeback still to be determined.