Markets moved with unusual confidence this week as a US-Iran ceasefire announcement — however fragile — cleared enough geopolitical risk from the board to push US equities to all-time highs and the Nasdaq to its longest winning streak in nearly two decades.
The Record Run
The S&P 500 closed at 7,041.28 on Wednesday, April 16, eclipsing its previous record set in January 2026. The Nasdaq logged its 12th consecutive positive session, a streak not seen since 2009. Week-to-date through Thursday, the Nasdaq had gained 5.2%, the S&P 500 3.3%, and the Dow Jones Industrial Average just over 1%. Asian markets followed suit: the Nikkei 225 rose 2.43% on Thursday, tracking the US rally.
The immediate trigger was a conditional ceasefire between the United States and Iran announced on April 8, with terms tied to the reopening of the Strait of Hormuz. Oil prices eased on the news. President Trump stated publicly that the conflict was “very close to over,” though both sides have since exchanged accusations of ceasefire violations and no formal peace agreement has been signed.
Why the Strait of Hormuz Matters to Markets
The Strait of Hormuz is the single most critical chokepoint in global energy infrastructure, with approximately 20% of the world’s oil trade transiting the narrow waterway between Iran and Oman. When the conflict escalated earlier in 2026 and threatened to close the strait, markets priced in a sustained supply shock. Insurance premiums for tanker routes spiked, energy equities outperformed, and risk assets broadly sold off.
The ceasefire flipped that dynamic. Lower oil prices reduce input costs across the economy, ease inflation expectations, and give the Federal Reserve more room to maintain or cut rates. That transmission mechanism — geopolitical de-escalation to energy prices to monetary policy expectations to equity valuations — explains the scale and speed of the market’s recovery.
Risks That Remain
The ceasefire is structurally fragile. There is no signed peace treaty, the terms remain disputed, and violations are already being reported by both parties. Analysts at several major banks have noted that the 12-day rally has priced in a best-case outcome that is not yet locked in.
Additionally, the S&P 500’s return to all-time highs came with elevated valuations. The forward P/E on the index remains above historical averages, meaning a renewed escalation or a disappointment in Q1 earnings season — which is now underway — could produce a sharp reversal.
Earnings Season as the Next Catalyst
With TSMC, ASML, and several major US banks already reporting strong Q1 results, the early read on earnings season is positive. The coming two weeks will bring results from the major US hyperscalers and consumer technology firms. If those results confirm that AI capex commitments are translating into revenue, markets may find additional support. If guidance disappoints, the ceasefire-driven rally may prove short-lived.
For now, investors are taking the win: the longest Nasdaq winning streak in 17 years, a new S&P 500 record, and a macro environment that — for the first time this year — looks more constructive than destructive.
