U.S. stocks surged to all-time highs this week, with investors shrugging off the ongoing Iran conflict and embracing a cascade of peace signals, strong labor data, and a blockbuster run in technology shares that pushed the major indexes into record territory.
The S&P 500 closed at 7,041.28 Thursday, crossing the 7,000 threshold for the first time in its history. The Nasdaq Composite settled at 24,102.70, logging its 12th consecutive positive session — its longest winning streak since 2009. For the week, the S&P 500 gained 3.3% and the Nasdaq rose 5.2%, while the Dow Jones Industrial Average added more than 1%.
The week’s gains defied a sobering geopolitical backdrop. Stocks climbed to records against a backdrop of war, an oil supply shock and economic forecasts warning of stunted growth. The explanation, according to Wall Street economists, lies in the market’s forward-looking nature. “The stock market isn’t trying to price what’s happening today,” said Joe Seydl, a senior markets economist at J.P. Morgan Private Bank. “The stock market is always trying to price what the world is going to look like six to 12 months from now.”
That calculus shifted sharply in investors’ favor as the week progressed. Stocks received a bump Thursday after President Donald Trump confirmed he spoke with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu, announcing a 10-day ceasefire set to begin at 5 p.m. EST. Then on Friday, Iran declared the Strait of Hormuz “completely open,” the chokepoint whose disruption had sent crude prices soaring in prior weeks.
The energy sector bore the brunt of the reversal. Oil prices fell 16% on the week — the worst weekly decline since April 2020, when prices dropped more than 19%. The plunge in crude provided relief to consumer-facing sectors, with cruise lines among the biggest beneficiaries. Royal Caribbean, Norwegian Cruise Line and Carnival each surged more than 9% Friday, propelling the S&P 500’s consumer discretionary sector to a 2.5% gain — the best performance among the index’s 11 sectors on the day.
Technology stocks drove much of the week’s broad advance. The Roundhill Magnificent Seven ETF rose more than 8% for the week, its third consecutive weekly gain, and has surged more than 14% in April — on pace for its largest monthly increase on record. Tesla led the group with a 15% weekly rally, while Microsoft soared nearly 14%, on pace for its largest weekly gain since 2007.
Retail investors, who had largely stood on the sidelines, began rejoining the rally. JPMorgan’s latest client flow data showed retail buying activity rebounding sharply, with overall participation rising to the 55th percentile from roughly the 10th percentile just days earlier.
The labor market provided additional ballast. Initial jobless claims totaled a seasonally adjusted 207,000 for the week ended April 11, down 11,000 from the prior period and below the consensus estimate of 215,000. The four-week moving average fell to its lowest level since June 2024.
The Federal Reserve, for its part, signaled patience. San Francisco Fed President Mary Daly, who had favored rate cuts before the Iran conflict began, said the central bank should now adopt a more measured posture. “Being in a wait-and-see-the-data mode and wait and see how the conflict resolves is a really nice place to be,” Ms. Daly said at an event at the University of California, Berkeley.
Not all corners of the market participated equally. The S&P 500 fell roughly 8% in the initial weeks of the Iran war before recovering. Analysts cautioned that the sprint back to highs may obscure underlying fragility, and that a re-escalation of hostilities remains a risk not yet priced into equities. Still, for a week that began with cease-fire uncertainty and ended with oil flows resuming and indexes at records, Mr. Market appeared willing to look past the smoke.
By: Montana Newsroom staff
