The Dow Jones Industrial Average finished up 0.6%, while the S&P 500 increased by over 1%. The Nasdaq Composite showed even stronger performance, leaping more than 1.2%, fueled by a notable rebound in tech stocks.
Stocks reversed their trend throughout the session after President Donald Trump indicated that Iranian leaders had contacted his administration earlier in the day to negotiate a “deal”.
Also read: Wall Street opens lower amid looming Hormuz tensions; earnings hopes cushion losses
This development followed Trump’s earlier threats to destroy Iranian vessels that attempted to disturb a US-led blockade in the Strait of Hormuz, marking a significant escalation before signs of de-escalation appeared.
Oil prices, which had initially surged due to supply concerns, also retreated. Brent crude reduced its gains to rise about 2% and stay below $100 per barrel, while WTI remained near $99, alleviating some immediate inflation worries.
The S&P 500 briefly turned positive for the year in Monday’s session, showcasing a remarkable rebound from earlier losses caused by geopolitical tensions. The index climbed approximately 0.5% on the day, nudging it slightly into positive territory for 2026 after having fallen more than 7% at the peak of the US-Iran conflict.
Tech rebound and earnings optimism anchor sentiment
A significant factor in the late-session upswing was a robust recovery in software stocks.
The iShares Expanded Tech-Software ETF experienced its best day in nearly a year, with leading companies like Microsoft, Oracle, Palantir, Salesforce, and Palo Alto Networks driving the momentum. This move represents a bullish reversal following last week’s downturn, lending support to the broader tech sector.
Looking at the bigger picture, the market continues to display resilience despite repeated shocks. US oil prices have surged over 70% in the past year, and inflation remains above 3%, yet equities have responded only modestly.
Also read: Jittery premarket: Dow slides over 500 pts as US-Iran talks collapse, Hormuz blockade looms
Even following the late-February escalation, the Nasdaq is still trading above pre-war levels, with the S&P 500 close behind. Last week’s ceasefire further bolstered sentiment, with the S&P 500 climbing 3.6%, the Nasdaq gaining 4.7%, and the Dow rising 3%.
This underlying strength is also connected to earnings optimism. Consensus forecasts suggest first-quarter earnings growth of 13.9% year-on-year, with projections of 20%–22% for the remaining quarters, potentially marking the strongest annual expansion since 2018, excluding the pandemic rebound.
The trend highlights how markets have absorbed geopolitical volatility, supported by expectations of strong corporate performance and AI-driven growth.
Attention now shifts firmly to earnings. Goldman Sachs has already commenced the season, with JPMorgan Chase, Citigroup, Wells Fargo, Morgan Stanley, and Bank of America scheduled throughout the week.
