Market Surge Amid Geopolitical Developments#
U.S. stocks experienced a significant rise on Friday after Iran announced that the Strait of Hormuz was "completely open" following a ceasefire between Israel and Lebanon. This news helped all three major stock indexes—Dow Jones, Nasdaq, and S&P 500—reach new record levels.
Key Index Performances#
The S&P 500 climbed 1.2%, closing at 7,126.06 and surpassing the 7,100 mark for the first time. The Nasdaq Composite saw a 1.52% increase, finishing at 24,468.48, marking its 13th consecutive winning session. The Dow Jones Industrial Average rose by 868.71 points, or 1.79%, to close at 49,447.43. Additionally, the small-cap Russell 2000 index also reached a new high, increasing by over 2%.
Recent Market Trends#
Despite the strong performance last week, the market's momentum faced challenges at the start of this week. Oil prices rebounded, and global stock markets retreated after renewed tensions in the Strait of Hormuz. Following Iran's initial announcement, the country reasserted its control over the waterway and attacked two Indian-flagged vessels. Furthermore, a U.S. Navy destroyer seized an Iranian cargo ship that was reportedly trying to evade a U.S. blockade. As a result, Brent crude oil prices fell about 5% below $95, and S&P 500 futures dipped as well.
Earnings Season Approaches#
Looking ahead, investors are gearing up for a busy week of corporate earnings reports, with nearly 20% of S&P 500 companies set to announce their first-quarter results. Tesla will kick off this earnings season on Wednesday, followed by other major companies like Boeing, Intel, and Procter & Gamble. Analysts at Morgan Stanley predict that S&P 500 companies will see a 12% growth in earnings year-over-year, with sales increasing by 7%.
Morgan Stanley strategists noted that the earnings growth for the so-called Magnificent Seven megacaps is expected to be 25% in 2026, compared to 11% for the rest of the index. As earnings season unfolds, analysts anticipate varied price movements, reflecting differing performance among companies.