Stocks Hit Fresh Highs as Wall Street Bets the Iran War Won’t Last

CNBC, the New York Times, CNN, AP, NBC News, and Reuters contributed to this report.

The rally keeps rolling.

The S&P 500 pushed to a new record on Wednesday, extending a sharp rebound that’s caught even seasoned traders a bit off guard. Just weeks ago, markets were sliding on fears tied to the Iran conflict. Now? Investors are piling back in.

The index climbed about 0.5% to 0.6%, notching its latest all-time high and capping a run that’s seen it rise in 10 of the past 11 sessions. The Nasdaq Composite has been even hotter, stretching its winning streak to 11 straight days with another solid gain. The Dow Jones Industrial Average didn’t join the party, slipping modestly.

This turnaround has been quick – and aggressive. After dropping close to 10% from its January peak and dipping into correction territory in late March, the S&P 500 has bounced roughly 10% in just two weeks. A classic V-shaped recovery, the kind Wall Street never gets tired of chasing.

What changed? Expectations.

Investors are increasingly betting the war between the US, Israel, and Iran won’t spiral further. There’s talk of renewed negotiations, maybe even a broader deal that would ease tensions and keep oil flowing through the Strait of Hormuz. That’s been enough to spark a relief rally, even if nothing concrete has materialized yet.

President Donald Trump added to the optimism, saying the conflict is “very close to over” and hinting that Iran is eager to strike a deal. Markets didn’t wait for confirmation – they rarely do.

Oil prices have also backed off their highs, which helps. They’re still elevated, hovering well above pre-war levels, but the worst-case panic has cooled. That alone has taken some pressure off equities.

There’s more under the hood. Earnings season is underway, and so far, results haven’t been bad. Banks like Bank of America and Morgan Stanley delivered stronger-than-expected numbers, reinforcing the idea that corporate profits can hold up even with geopolitical noise in the background.

Tech stocks are doing heavy lifting again. Big names – and the broader AI trade – have bounced hard, pushing indexes higher. Momentum is back, and no one wants to miss it.

Still, not everyone’s convinced. Some analysts warn the rally is leaning heavily on hope. Oil is still expensive. The ceasefire is fragile. And markets have a habit of getting ahead of themselves when headlines turn even slightly positive.

For now, though, traders are looking past the risks. The message from Wall Street is pretty clear: if the war winds down – or even just stops getting worse – stocks think there’s more upside to chase.